Correlation Between Zurich Insurance and Swiss Mid
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Swiss Mid 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 Mid 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 Mid Price, you can compare the effects of market volatilities on Zurich Insurance and Swiss Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Swiss Mid.
Diversification Opportunities for Zurich Insurance and Swiss Mid
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zurich and Swiss is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Swiss Mid Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Mid Price 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Mid Price has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Swiss Mid go up and down completely randomly.
Pair Corralation between Zurich Insurance and Swiss Mid
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 3.75 times less return on investment than Swiss Mid. In addition to that, Zurich Insurance is 1.96 times more volatile than Swiss Mid Price. It trades about 0.08 of its total potential returns per unit of risk. Swiss Mid Price is currently generating about 0.57 per unit of volatility. If you would invest 262,681 in Swiss Mid Price on November 4, 2024 and sell it today you would earn a total of 17,277 from holding Swiss Mid Price or generate 6.58% 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. Swiss Mid Price
Performance |
| Timeline |
Zurich Insurance and Swiss Mid Volatility Contrast
Predicted Return Density |
| Returns |
Zurich Insurance Group
Pair trading matchups for Zurich Insurance
Swiss Mid Price
Pair trading matchups for Swiss Mid
Pair Trading with Zurich Insurance and Swiss Mid
The main advantage of trading using opposite Zurich Insurance and Swiss Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Swiss Mid 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 Mid will offset losses from the drop in Swiss Mid'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 |
| Swiss Mid vs. Logitech International SA | Swiss Mid vs. Cicor Technologies | Swiss Mid vs. mobilezone ag | Swiss Mid vs. Softwareone 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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