Correlation Between ZURICH INSURANCE and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and Prosiebensat at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ZURICH INSURANCE and Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZURICH INSURANCE GROUP and Prosiebensat 1 Media, you can compare the effects of market volatilities on ZURICH INSURANCE and Prosiebensat and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ZURICH INSURANCE with a short position of Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and Prosiebensat.
Diversification Opportunities for ZURICH INSURANCE and Prosiebensat
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ZURICH and Prosiebensat is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media and ZURICH INSURANCE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ZURICH INSURANCE GROUP are associated (or correlated) with Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and Prosiebensat go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and Prosiebensat
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to under-perform the Prosiebensat. But the stock apears to be less risky and, when comparing its historical volatility, ZURICH INSURANCE GROUP is 4.29 times less risky than Prosiebensat. The stock trades about -0.12 of its potential returns per unit of risk. The Prosiebensat 1 Media is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Prosiebensat 1 Media on September 26, 2024 and sell it today you would earn a total of 26.00 from holding Prosiebensat 1 Media or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. Prosiebensat 1 Media
Performance |
| Timeline |
| ZURICH INSURANCE |
| Prosiebensat 1 Media |
ZURICH INSURANCE and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and Prosiebensat
The main advantage of trading using opposite ZURICH INSURANCE and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, Prosiebensat can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prosiebensat will offset losses from the drop in Prosiebensat's long position.| ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Microsoft | ZURICH INSURANCE vs. Microsoft |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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