Correlation Between Zurich Insurance and Sims Metal
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Sims Metal 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 Sims Metal 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 Sims Metal Management, you can compare the effects of market volatilities on Zurich Insurance and Sims Metal 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 Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Sims Metal.
Diversification Opportunities for Zurich Insurance and Sims Metal
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurich and Sims is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Sims Metal Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims Metal Management 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 Sims Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims Metal Management has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Sims Metal go up and down completely randomly.
Pair Corralation between Zurich Insurance and Sims Metal
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.95 times more return on investment than Sims Metal. However, Zurich Insurance Group is 1.06 times less risky than Sims Metal. It trades about 0.07 of its potential returns per unit of risk. Sims Metal Management is currently generating about 0.05 per unit of risk. If you would invest 2,336 in Zurich Insurance Group on December 4, 2024 and sell it today you would earn a total of 864.00 from holding Zurich Insurance Group or generate 36.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Zurich Insurance Group vs. Sims Metal Management
Performance |
Timeline |
Zurich Insurance |
Sims Metal Management |
Zurich Insurance and Sims Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zurich Insurance and Sims Metal
The main advantage of trading using opposite Zurich Insurance and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Sims Metal 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 Sims Metal will offset losses from the drop in Sims Metal's long position.Zurich Insurance vs. ADRIATIC METALS LS 013355 | Zurich Insurance vs. Xinhua Winshare Publishing | Zurich Insurance vs. DeVry Education Group | Zurich Insurance vs. ARDAGH METAL PACDL 0001 |
Sims Metal vs. Lippo Malls Indonesia | Sims Metal vs. H2O Retailing | Sims Metal vs. Tradeweb Markets | Sims Metal vs. Platinum Investment Management |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |