Correlation Between Neometals and Zurich Insurance

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

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

Diversification Opportunities for Neometals and Zurich Insurance

-0.18

Correlation Coefficient

Neometals  Zurich Insurance

Good diversification

The 3 months correlation between Neometals and Zurich is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Neometals 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 Neometals 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 Neometals i.e., Neometals and Zurich Insurance go up and down completely randomly.

Pair Corralation between Neometals and Zurich Insurance

Assuming the 90 days trading horizon Neometals is expected to generate 15.54 times less return on investment than Zurich Insurance. In addition to that, Neometals is 7.09 times more volatile than Zurich Insurance Group. It trades about 0.0 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.26 per unit of volatility. If you would invest  49,450  in Zurich Insurance Group on September 4, 2024 and sell it today you would earn a total of  6,220  from holding Zurich Insurance Group or generate 12.58% return on investment over 90 days.

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

Neometals  vs.  Zurich Insurance Group

Neometals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Zurich Insurance

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 20 (%) 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 January 2025.

Pair Trading with Neometals and Zurich Insurance

The main advantage of trading using opposite Neometals and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals 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 Neometals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.