Correlation Between SF Sustainable and Zurich Invest

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

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

Diversification Opportunities for SF Sustainable and Zurich Invest

-0.02

Correlation Coefficient

SF Sustainable  Zurich Invest

Good diversification

The 3 months correlation between SFPF and Zurich is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SF Sustainable Property and Zurich Invest II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Invest II and SF Sustainable 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 SF Sustainable Property are associated (or correlated) with Zurich Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Invest II has no effect on the direction of SF Sustainable i.e., SF Sustainable and Zurich Invest go up and down completely randomly.

Pair Corralation between SF Sustainable and Zurich Invest

Assuming the 90 days trading horizon SF Sustainable Property is expected to generate 6.03 times more return on investment than Zurich Invest. However, SF Sustainable is 6.03 times more volatile than Zurich Invest II. It trades about 0.05 of its potential returns per unit of risk. Zurich Invest II is currently generating about 0.1 per unit of risk. If you would invest  11,107  in SF Sustainable Property on September 26, 2024 and sell it today you would earn a total of  1,843  from holding SF Sustainable Property or generate 16.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

SF Sustainable Property  vs.  Zurich Invest II

SF Sustainable Property

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SF Sustainable Property are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, SF Sustainable is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Zurich Invest II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zurich Invest II has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady forward-looking indicators, Zurich Invest is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with SF Sustainable and Zurich Invest

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

The idea behind SF Sustainable Property and Zurich Invest II 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.