Correlation Between Zurich Invest and SF Sustainable

Can any of the company-specific risk be diversified away by investing in both Zurich Invest and SF Sustainable 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 Invest and SF Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zurich Invest II and SF Sustainable Property, you can compare the effects of market volatilities on Zurich Invest and SF Sustainable 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 Invest with a short position of SF Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Invest and SF Sustainable.

Diversification Opportunities for Zurich Invest and SF Sustainable

-0.02

Correlation Coefficient

Zurich Invest  SF Sustainable

Good diversification

The 3 months correlation between Zurich and SFPF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Invest II and SF Sustainable Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SF Sustainable Property and Zurich Invest 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 Invest II are associated (or correlated) with SF Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SF Sustainable Property has no effect on the direction of Zurich Invest i.e., Zurich Invest and SF Sustainable go up and down completely randomly.

Pair Corralation between Zurich Invest and SF Sustainable

Assuming the 90 days trading horizon Zurich Invest is expected to generate 3.11 times less return on investment than SF Sustainable. But when comparing it to its historical volatility, Zurich Invest II is 6.03 times less risky than SF Sustainable. It trades about 0.1 of its potential returns per unit of risk. SF Sustainable Property is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  11,107  in SF Sustainable Property on September 26, 2024 and sell it today you would earn a total of  1,843  from holding SF Sustainable Property or generate 16.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Zurich Invest II  vs.  SF Sustainable Property

Zurich Invest II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zurich Invest II has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady forward-looking indicators, Zurich Invest is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

SF Sustainable Property

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SF Sustainable Property are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, SF Sustainable is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Zurich Invest and SF Sustainable

The main advantage of trading using opposite Zurich Invest and SF Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Invest position performs unexpectedly, SF Sustainable 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 SF Sustainable will offset losses from the drop in SF Sustainable's long position.

The idea behind Zurich Invest II and SF Sustainable Property pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.