Correlation Between ZURICH INSURANCE and Tradegate
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and Tradegate 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on ZURICH INSURANCE and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and Tradegate.
Diversification Opportunities for ZURICH INSURANCE and Tradegate
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ZURICH and Tradegate is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and Tradegate go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and Tradegate
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.84 times more return on investment than Tradegate. However, ZURICH INSURANCE GROUP is 1.19 times less risky than Tradegate. It trades about 0.1 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.05 per unit of risk. If you would invest 2,172 in ZURICH INSURANCE GROUP on September 14, 2024 and sell it today you would earn a total of 728.00 from holding ZURICH INSURANCE GROUP or generate 33.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| ZURICH INSURANCE |
| Tradegate AG Wertpap |
ZURICH INSURANCE and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and Tradegate
The main advantage of trading using opposite ZURICH INSURANCE and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc |
| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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