Correlation Between INDOFOOD AGRI and ZURICH INSURANCE
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and ZURICH INSURANCE 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 INDOFOOD AGRI and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDOFOOD AGRI RES and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on INDOFOOD AGRI and ZURICH INSURANCE 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 INDOFOOD AGRI with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and ZURICH INSURANCE.
Diversification Opportunities for INDOFOOD AGRI and ZURICH INSURANCE
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INDOFOOD and ZURICH is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and INDOFOOD AGRI 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 INDOFOOD AGRI RES are associated (or correlated) with ZURICH INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZURICH INSURANCE has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and ZURICH INSURANCE go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and ZURICH INSURANCE
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to under-perform the ZURICH INSURANCE. In addition to that, INDOFOOD AGRI is 1.56 times more volatile than ZURICH INSURANCE GROUP. It trades about -0.13 of its total potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about -0.09 per unit of volatility. If you would invest 2,880 in ZURICH INSURANCE GROUP on October 18, 2024 and sell it today you would lose (60.00) from holding ZURICH INSURANCE GROUP or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. ZURICH INSURANCE GROUP
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| ZURICH INSURANCE |
INDOFOOD AGRI and ZURICH INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and ZURICH INSURANCE
The main advantage of trading using opposite INDOFOOD AGRI and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, ZURICH INSURANCE 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 ZURICH INSURANCE will offset losses from the drop in ZURICH INSURANCE's long position.| INDOFOOD AGRI vs. Tyson Foods | INDOFOOD AGRI vs. EBRO FOODS | INDOFOOD AGRI vs. Benchmark Electronics | INDOFOOD AGRI vs. Meiko Electronics Co |
| ZURICH INSURANCE vs. INDOFOOD AGRI RES | ZURICH INSURANCE vs. Canadian Utilities Limited | ZURICH INSURANCE vs. Sunny Optical Technology | ZURICH INSURANCE vs. X FAB Silicon Foundries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |