Correlation Between Zurich Insurance and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Swiss Life 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 Life 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 Life Holding, you can compare the effects of market volatilities on Zurich Insurance and Swiss Life 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 Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Swiss Life.
Diversification Opportunities for Zurich Insurance and Swiss Life
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and Swiss is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life 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 Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Swiss Life go up and down completely randomly.
Pair Corralation between Zurich Insurance and Swiss Life
Assuming the 90 days horizon Zurich Insurance Group is expected to generate 0.69 times more return on investment than Swiss Life. However, Zurich Insurance Group is 1.45 times less risky than Swiss Life. It trades about 0.11 of its potential returns per unit of risk. Swiss Life Holding is currently generating about 0.06 per unit of risk. If you would invest 2,287 in Zurich Insurance Group on September 12, 2024 and sell it today you would earn a total of 863.00 from holding Zurich Insurance Group or generate 37.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Swiss Life Holding
Performance |
| Timeline |
| Zurich Insurance |
| Swiss Life Holding |
Zurich Insurance and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Swiss Life
The main advantage of trading using opposite Zurich Insurance and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Swiss Life 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 Life will offset losses from the drop in Swiss Life's long position.| Zurich Insurance vs. Assicurazioni Generali SpA | Zurich Insurance vs. ageas SANV | Zurich Insurance vs. AXA SA | Zurich Insurance vs. Sampo OYJ |
| Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Allianz SE | Swiss Life vs. Swiss Life Holding | Swiss Life vs. Zurich Insurance Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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