Correlation Between Zurich Insurance and PLAYSTUDIOS

Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and PLAYSTUDIOS 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 PLAYSTUDIOS 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 PLAYSTUDIOS A DL 0001, you can compare the effects of market volatilities on Zurich Insurance and PLAYSTUDIOS 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 PLAYSTUDIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and PLAYSTUDIOS.

Diversification Opportunities for Zurich Insurance and PLAYSTUDIOS

0.82

Correlation Coefficient

Zurich Insurance  PLAYSTUDIOS

Very poor diversification

The 3 months correlation between Zurich and PLAYSTUDIOS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and PLAYSTUDIOS A DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYSTUDIOS A DL 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 PLAYSTUDIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYSTUDIOS A DL has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and PLAYSTUDIOS go up and down completely randomly.

Pair Corralation between Zurich Insurance and PLAYSTUDIOS

Assuming the 90 days trading horizon Zurich Insurance Group is expected to under-perform the PLAYSTUDIOS. But the stock apears to be less risky and, when comparing its historical volatility, Zurich Insurance Group is 2.61 times less risky than PLAYSTUDIOS. The stock trades about -0.17 of its potential returns per unit of risk. The PLAYSTUDIOS A DL 0001 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  181.00  in PLAYSTUDIOS A DL 0001 on October 5, 2024 and sell it today you would earn a total of  0.00  from holding PLAYSTUDIOS A DL 0001 or generate 0.0% return on investment over 90 days.

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

Zurich Insurance Group  vs.  PLAYSTUDIOS A DL 0001

Zurich Insurance

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Zurich Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile forward indicators, Zurich Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PLAYSTUDIOS A DL

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days PLAYSTUDIOS A DL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, PLAYSTUDIOS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zurich Insurance and PLAYSTUDIOS

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

The idea behind Zurich Insurance Group and PLAYSTUDIOS A DL 0001 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.