Correlation Between Zurich Insurance and Schweizerische Nationalbank
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Schweizerische Nationalbank 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 Schweizerische Nationalbank 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 Schweizerische Nationalbank, you can compare the effects of market volatilities on Zurich Insurance and Schweizerische Nationalbank 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 Schweizerische Nationalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Schweizerische Nationalbank.
Diversification Opportunities for Zurich Insurance and Schweizerische Nationalbank
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zurich and Schweizerische is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank 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 Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Schweizerische Nationalbank go up and down completely randomly.
Pair Corralation between Zurich Insurance and Schweizerische Nationalbank
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.58 times more return on investment than Schweizerische Nationalbank. However, Zurich Insurance Group is 1.71 times less risky than Schweizerische Nationalbank. It trades about 0.08 of its potential returns per unit of risk. Schweizerische Nationalbank is currently generating about -0.05 per unit of risk. If you would invest 40,610 in Zurich Insurance Group on September 19, 2024 and sell it today you would earn a total of 14,510 from holding Zurich Insurance Group or generate 35.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.37% |
| Values | Daily Returns |
Zurich Insurance Group vs. Schweizerische Nationalbank
Performance |
| Timeline |
| Zurich Insurance |
| Schweizerische Nationalbank |
Zurich Insurance and Schweizerische Nationalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Schweizerische Nationalbank
The main advantage of trading using opposite Zurich Insurance and Schweizerische Nationalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Schweizerische Nationalbank 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 Schweizerische Nationalbank will offset losses from the drop in Schweizerische Nationalbank's long position.| Zurich Insurance vs. Swiss Re AG | Zurich Insurance vs. Swisscom AG | Zurich Insurance vs. Lonza Group AG | Zurich Insurance vs. Novartis 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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