Correlation Between Zurich Insurance and VP Bank
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and VP Bank 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 VP Bank 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 VP Bank AG, you can compare the effects of market volatilities on Zurich Insurance and VP Bank 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 VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and VP Bank.
Diversification Opportunities for Zurich Insurance and VP Bank
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and VPBN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank AG 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 VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and VP Bank go up and down completely randomly.
Pair Corralation between Zurich Insurance and VP Bank
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.56 times more return on investment than VP Bank. However, Zurich Insurance Group is 1.77 times less risky than VP Bank. It trades about 0.26 of its potential returns per unit of risk. VP Bank AG is currently generating about 0.02 per unit of risk. If you would invest 52,060 in Zurich Insurance Group on August 25, 2024 and sell it today you would earn a total of 3,240 from holding Zurich Insurance Group or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zurich Insurance Group vs. VP Bank AG
Performance |
| Timeline |
| Zurich Insurance |
| VP Bank AG |
Zurich Insurance and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and VP Bank
The main advantage of trading using opposite Zurich Insurance and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, VP Bank 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 VP Bank will offset losses from the drop in VP Bank'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 |
| VP Bank vs. Swissquote Group Holding | VP Bank vs. Banque Cantonale | VP Bank vs. Barry Callebaut AG | VP Bank vs. Vontobel 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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