Correlation Between Zurich Insurance and Enstar Group
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Enstar Group 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 Enstar Group 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 Enstar Group Limited, you can compare the effects of market volatilities on Zurich Insurance and Enstar Group 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 Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Enstar Group.
Diversification Opportunities for Zurich Insurance and Enstar Group
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zurich and Enstar is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Enstar Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group Limited 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 Enstar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enstar Group Limited has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Enstar Group go up and down completely randomly.
Pair Corralation between Zurich Insurance and Enstar Group
Assuming the 90 days horizon Zurich Insurance Group is expected to generate 3.64 times more return on investment than Enstar Group. However, Zurich Insurance is 3.64 times more volatile than Enstar Group Limited. It trades about 0.15 of its potential returns per unit of risk. Enstar Group Limited is currently generating about 0.03 per unit of risk. If you would invest 3,027 in Zurich Insurance Group on August 27, 2024 and sell it today you would earn a total of 92.00 from holding Zurich Insurance Group or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Enstar Group Limited
Performance |
| Timeline |
| Zurich Insurance |
| Enstar Group Limited |
Zurich Insurance and Enstar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Enstar Group
The main advantage of trading using opposite Zurich Insurance and Enstar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Enstar Group 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 Enstar Group will offset losses from the drop in Enstar Group's long position.| Zurich Insurance vs. Assicurazioni Generali SpA | Zurich Insurance vs. ageas SANV | Zurich Insurance vs. AXA SA | Zurich Insurance vs. Sampo OYJ |
| Enstar Group vs. Global Indemnity PLC | Enstar Group vs. Erie Indemnity | Enstar Group vs. AMERISAFE | Enstar Group vs. Diamond Hill Investment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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