Correlation Between Zurich Insurance and AXA SA
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and AXA SA 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 AXA SA 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 AXA SA, you can compare the effects of market volatilities on Zurich Insurance and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and AXA SA.
Diversification Opportunities for Zurich Insurance and AXA SA
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and AXA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and AXA SA go up and down completely randomly.
Pair Corralation between Zurich Insurance and AXA SA
Assuming the 90 days horizon Zurich Insurance Group is expected to generate 0.91 times more return on investment than AXA SA. However, Zurich Insurance Group is 1.1 times less risky than AXA SA. It trades about 0.07 of its potential returns per unit of risk. AXA SA is currently generating about 0.06 per unit of risk. If you would invest 44,718 in Zurich Insurance Group on September 19, 2024 and sell it today you would earn a total of 15,895 from holding Zurich Insurance Group or generate 35.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.7% |
| Values | Daily Returns |
Zurich Insurance Group vs. AXA SA
Performance |
| Timeline |
| Zurich Insurance |
| AXA SA |
Zurich Insurance and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and AXA SA
The main advantage of trading using opposite Zurich Insurance and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Zurich Insurance Group | Zurich Insurance vs. AXA SA |
| AXA SA vs. Berkshire Hathaway | AXA SA vs. Berkshire Hathaway | AXA SA vs. Zurich Insurance Group | AXA SA vs. American International Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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