Correlation Between Zurich Insurance and BANK HANDLOWY

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

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

Diversification Opportunities for Zurich Insurance and BANK HANDLOWY

-0.75

Correlation Coefficient

Zurich Insurance  BANK HANDLOWY

Pay attention - limited upside

The 3 months correlation between Zurich and BANK is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY and Zurich Insurance 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 Zurich Insurance Group are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and BANK HANDLOWY go up and down completely randomly.

Pair Corralation between Zurich Insurance and BANK HANDLOWY

Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 2.86 times more return on investment than BANK HANDLOWY. However, Zurich Insurance is 2.86 times more volatile than BANK HANDLOWY. It trades about 0.1 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about -0.2 per unit of risk. If you would invest  2,680  in Zurich Insurance Group on September 3, 2024 and sell it today you would earn a total of  340.00  from holding Zurich Insurance Group or generate 12.69% return on investment over 90 days.

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

Zurich Insurance Group  vs.  BANK HANDLOWY

Zurich Insurance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Zurich Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

BANK HANDLOWY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK HANDLOWY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Zurich Insurance and BANK HANDLOWY

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

The idea behind Zurich Insurance Group and BANK HANDLOWY 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.