Correlation Between Ageas SA/NV and Zurich Insurance

Can any of the company-specific risk be diversified away by investing in both Ageas SA/NV 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 Ageas SA/NV and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ageas SANV and Zurich Insurance Group, you can compare the effects of market volatilities on Ageas SA/NV 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 Ageas SA/NV with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ageas SA/NV and Zurich Insurance.

Diversification Opportunities for Ageas SA/NV and Zurich Insurance

0.12

Correlation Coefficient

Ageas SA/NV  Zurich Insurance

Average diversification

The 3 months correlation between Ageas and Zurich is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ageas SANV and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Ageas SA/NV 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 ageas SANV 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 Ageas SA/NV i.e., Ageas SA/NV and Zurich Insurance go up and down completely randomly.

Pair Corralation between Ageas SA/NV and Zurich Insurance

Assuming the 90 days horizon ageas SANV is expected to under-perform the Zurich Insurance. In addition to that, Ageas SA/NV is 1.27 times more volatile than Zurich Insurance Group. It trades about -0.02 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.17 per unit of volatility. If you would invest  2,911  in Zurich Insurance Group on September 2, 2024 and sell it today you would earn a total of  261.00  from holding Zurich Insurance Group or generate 8.97% return on investment over 90 days.

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

ageas SANV  vs.  Zurich Insurance Group

Ageas SA/NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ageas SANV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ageas SA/NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zurich Insurance

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Zurich Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ageas SA/NV and Zurich Insurance

The main advantage of trading using opposite Ageas SA/NV and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ageas SA/NV 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.

The idea behind ageas SANV and Zurich Insurance 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.