Correlation Between Zurich Insurance and Made Tech

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

Diversification Opportunities for Zurich Insurance and Made Tech

0.23

Correlation Coefficient

Zurich Insurance  Made Tech

Modest diversification

The 3 months correlation between Zurich and Made is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Made Tech go up and down completely randomly.

Pair Corralation between Zurich Insurance and Made Tech

Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.31 times more return on investment than Made Tech. However, Zurich Insurance Group is 3.25 times less risky than Made Tech. It trades about 0.23 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.04 per unit of risk. If you would invest  53,310  in Zurich Insurance Group on December 23, 2024 and sell it today you would earn a total of  7,530  from holding Zurich Insurance Group or generate 14.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Zurich Insurance Group  vs.  Made Tech Group

Zurich Insurance

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zurich Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Made Tech Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Made Tech Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Made Tech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Zurich Insurance and Made Tech

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

The idea behind Zurich Insurance Group and Made Tech Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.