Correlation Between Zurich Insurance and Private Equity
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Private Equity 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 Private Equity 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 Private Equity Holding, you can compare the effects of market volatilities on Zurich Insurance and Private Equity 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 Private Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Private Equity.
Diversification Opportunities for Zurich Insurance and Private Equity
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zurich and Private is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Private Equity Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Private Equity 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 Private Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Private Equity Holding has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Private Equity go up and down completely randomly.
Pair Corralation between Zurich Insurance and Private Equity
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.48 times more return on investment than Private Equity. However, Zurich Insurance Group is 2.09 times less risky than Private Equity. It trades about 0.42 of its potential returns per unit of risk. Private Equity Holding is currently generating about -0.07 per unit of risk. If you would invest 54,760 in Zurich Insurance Group on November 27, 2024 and sell it today you would earn a total of 3,660 from holding Zurich Insurance Group or generate 6.68% 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. Private Equity Holding
Performance |
| Timeline |
| Zurich Insurance |
| Private Equity Holding |
Zurich Insurance and Private Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Private Equity
The main advantage of trading using opposite Zurich Insurance and Private Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Private Equity 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 Private Equity will offset losses from the drop in Private Equity's long position.| Zurich Insurance vs. Swiss Re AG | Zurich Insurance vs. Novartis AG | Zurich Insurance vs. Swiss Life Holding | Zurich Insurance vs. UBS Group AG |
| Private Equity vs. Orior AG | Private Equity vs. HIAG Immobilien Holding | Private Equity vs. Bellevue Group AG | Private Equity vs. Feintool International Holding |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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