Correlation Between Power Assets and ZURICH INSURANCE

Can any of the company-specific risk be diversified away by investing in both Power Assets 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 Power Assets and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Power Assets Holdings and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on Power Assets 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 Power Assets with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and ZURICH INSURANCE.

Diversification Opportunities for Power Assets and ZURICH INSURANCE

-0.36

Correlation Coefficient

Power Assets  ZURICH INSURANCE

Very good diversification

The 3 months correlation between Power and ZURICH is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets Holdings and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and Power Assets 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 Power Assets Holdings 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 Power Assets i.e., Power Assets and ZURICH INSURANCE go up and down completely randomly.

Pair Corralation between Power Assets and ZURICH INSURANCE

Assuming the 90 days horizon Power Assets Holdings is expected to under-perform the ZURICH INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, Power Assets Holdings is 1.23 times less risky than ZURICH INSURANCE. The stock trades about -0.13 of its potential returns per unit of risk. The ZURICH INSURANCE GROUP is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,860  in ZURICH INSURANCE GROUP on December 21, 2024 and sell it today you would earn a total of  280.00  from holding ZURICH INSURANCE GROUP or generate 9.79% return on investment over 90 days.

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

Power Assets Holdings  vs.  ZURICH INSURANCE GROUP

Power Assets Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Power Assets Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ZURICH INSURANCE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZURICH INSURANCE GROUP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ZURICH INSURANCE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Power Assets and ZURICH INSURANCE

The main advantage of trading using opposite Power Assets and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets 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 Power Assets Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..