Correlation Between Meyer Burger and Zurich Insurance

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

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

Diversification Opportunities for Meyer Burger and Zurich Insurance

-0.84

Correlation Coefficient

Meyer Burger  Zurich Insurance

Pay attention - limited upside

The 3 months correlation between Meyer and Zurich is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Meyer Burger Tech and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Meyer Burger 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 Meyer Burger Tech 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 Meyer Burger i.e., Meyer Burger and Zurich Insurance go up and down completely randomly.

Pair Corralation between Meyer Burger and Zurich Insurance

Assuming the 90 days trading horizon Meyer Burger Tech is expected to under-perform the Zurich Insurance. In addition to that, Meyer Burger is 16.47 times more volatile than Zurich Insurance Group. It trades about -0.08 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.24 per unit of volatility. If you would invest  49,650  in Zurich Insurance Group on September 3, 2024 and sell it today you would earn a total of  6,610  from holding Zurich Insurance Group or generate 13.31% return on investment over 90 days.

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

Meyer Burger Tech  vs.  Zurich Insurance Group

Meyer Burger Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meyer Burger Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Zurich Insurance

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Zurich Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Meyer Burger and Zurich Insurance

The main advantage of trading using opposite Meyer Burger and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meyer Burger 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 Meyer Burger Tech 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.