Correlation Between Zurich Insurance and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Swiss Life 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 Swiss Life 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 Swiss Life Holding, you can compare the effects of market volatilities on Zurich Insurance and Swiss Life 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 Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Swiss Life.
Diversification Opportunities for Zurich Insurance and Swiss Life
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zurich and Swiss is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding 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 Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Swiss Life go up and down completely randomly.
Pair Corralation between Zurich Insurance and Swiss Life
Assuming the 90 days horizon Zurich Insurance Group is expected to generate 0.95 times more return on investment than Swiss Life. However, Zurich Insurance Group is 1.05 times less risky than Swiss Life. It trades about 0.19 of its potential returns per unit of risk. Swiss Life Holding is currently generating about -0.26 per unit of risk. If you would invest 59,252 in Zurich Insurance Group on August 27, 2024 and sell it today you would earn a total of 2,575 from holding Zurich Insurance Group or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Swiss Life Holding
Performance |
| Timeline |
| Zurich Insurance |
| Swiss Life Holding |
Zurich Insurance and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Swiss Life
The main advantage of trading using opposite Zurich Insurance and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Swiss Life 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 Swiss Life will offset losses from the drop in Swiss Life's long position.| Zurich Insurance vs. Athene Holding | Zurich Insurance vs. Athene Holding | Zurich Insurance vs. Arch Capital 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |