Correlation Between Zurich Insurance and Vetropack Holding
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Vetropack Holding 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 Vetropack Holding 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 Vetropack Holding SA, you can compare the effects of market volatilities on Zurich Insurance and Vetropack Holding 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 Vetropack Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Vetropack Holding.
Diversification Opportunities for Zurich Insurance and Vetropack Holding
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurich and Vetropack is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Vetropack Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vetropack 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 Vetropack Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vetropack Holding has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Vetropack Holding go up and down completely randomly.
Pair Corralation between Zurich Insurance and Vetropack Holding
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 1.45 times less return on investment than Vetropack Holding. But when comparing it to its historical volatility, Zurich Insurance Group is 4.37 times less risky than Vetropack Holding. It trades about 0.46 of its potential returns per unit of risk. Vetropack Holding SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,625 in Vetropack Holding SA on November 28, 2024 and sell it today you would earn a total of 265.00 from holding Vetropack Holding SA or generate 10.1% 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. Vetropack Holding SA
Performance |
| Timeline |
| Zurich Insurance |
| Vetropack Holding |
Zurich Insurance and Vetropack Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Vetropack Holding
The main advantage of trading using opposite Zurich Insurance and Vetropack Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Vetropack Holding 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 Vetropack Holding will offset losses from the drop in Vetropack Holding'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 |
| Vetropack Holding vs. Schweiter Technologies AG | Vetropack Holding vs. SIG Combibloc Group | Vetropack Holding vs. SFS Group AG | Vetropack Holding vs. Bucher Industries 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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