Correlation Between Zurich Insurance and FEMALE HEALTH

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

Diversification Opportunities for Zurich Insurance and FEMALE HEALTH

-0.74

Correlation Coefficient

Zurich Insurance  FEMALE HEALTH

Pay attention - limited upside

The 3 months correlation between Zurich and FEMALE is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and FEMALE HEALTH go up and down completely randomly.

Pair Corralation between Zurich Insurance and FEMALE HEALTH

Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.28 times more return on investment than FEMALE HEALTH. However, Zurich Insurance Group is 3.58 times less risky than FEMALE HEALTH. It trades about 0.09 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.0 per unit of risk. If you would invest  2,800  in Zurich Insurance Group on December 29, 2024 and sell it today you would earn a total of  380.00  from holding Zurich Insurance Group or generate 13.57% 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.  FEMALE HEALTH

Zurich Insurance

Risk-Adjusted Performance

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.

FEMALE HEALTH

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Zurich Insurance and FEMALE HEALTH

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

The idea behind Zurich Insurance Group and FEMALE HEALTH 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.