Correlation Between Zurich Insurance and Griffin Mining

Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Griffin Mining 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 Griffin Mining 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 Griffin Mining, you can compare the effects of market volatilities on Zurich Insurance and Griffin Mining 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 Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Griffin Mining.

Diversification Opportunities for Zurich Insurance and Griffin Mining

-0.32

Correlation Coefficient

Zurich Insurance  Griffin Mining

Very good diversification

The 3 months correlation between Zurich and Griffin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining 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 Griffin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffin Mining has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Griffin Mining go up and down completely randomly.

Pair Corralation between Zurich Insurance and Griffin Mining

Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.35 times more return on investment than Griffin Mining. However, Zurich Insurance Group is 2.89 times less risky than Griffin Mining. It trades about 0.14 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.01 per unit of risk. If you would invest  50,700  in Zurich Insurance Group on October 8, 2024 and sell it today you would earn a total of  3,510  from holding Zurich Insurance Group or generate 6.92% 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.  Griffin Mining

Zurich Insurance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zurich Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Griffin Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Griffin Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Griffin Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zurich Insurance and Griffin Mining

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

The idea behind Zurich Insurance Group and Griffin Mining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.