Correlation Between Zurich Insurance and St Galler
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and St Galler 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 St Galler 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 St Galler Kantonalbank, you can compare the effects of market volatilities on Zurich Insurance and St Galler 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 St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and St Galler.
Diversification Opportunities for Zurich Insurance and St Galler
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurich and SGKN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank 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 St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and St Galler go up and down completely randomly.
Pair Corralation between Zurich Insurance and St Galler
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 1.12 times more return on investment than St Galler. However, Zurich Insurance is 1.12 times more volatile than St Galler Kantonalbank. It trades about 0.14 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about -0.06 per unit of risk. If you would invest 40,447 in Zurich Insurance Group on August 25, 2024 and sell it today you would earn a total of 14,853 from holding Zurich Insurance Group or generate 36.72% 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. St Galler Kantonalbank
Performance |
| Timeline |
| Zurich Insurance |
| St Galler Kantonalbank |
Zurich Insurance and St Galler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and St Galler
The main advantage of trading using opposite Zurich Insurance and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler'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 |
| St Galler vs. Banque Cantonale | St Galler vs. Luzerner Kantonalbank AG | St Galler vs. Berner Kantonalbank AG | St Galler vs. Helvetia Holding AG |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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