Correlation Between ZURICH INSURANCE and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on ZURICH INSURANCE and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and Summit Hotel.
Diversification Opportunities for ZURICH INSURANCE and Summit Hotel
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZURICH and Summit is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and Summit Hotel go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and Summit Hotel
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.65 times more return on investment than Summit Hotel. However, ZURICH INSURANCE GROUP is 1.54 times less risky than Summit Hotel. It trades about 0.09 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.03 per unit of risk. If you would invest 2,153 in ZURICH INSURANCE GROUP on September 24, 2024 and sell it today you would earn a total of 667.00 from holding ZURICH INSURANCE GROUP or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. Summit Hotel Properties
Performance |
| Timeline |
| ZURICH INSURANCE |
| Summit Hotel Properties |
ZURICH INSURANCE and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and Summit Hotel
The main advantage of trading using opposite ZURICH INSURANCE and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Microsoft |
| Summit Hotel vs. ZURICH INSURANCE GROUP | Summit Hotel vs. PREMIER FOODS | Summit Hotel vs. MagnaChip Semiconductor Corp | Summit Hotel vs. JJ SNACK FOODS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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