Correlation Between ZURICH INSURANCE and QUEEN S

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

Diversification Opportunities for ZURICH INSURANCE and QUEEN S

0.51

Correlation Coefficient

ZURICH INSURANCE  QUEEN S

Very weak diversification

The 3 months correlation between ZURICH and QUEEN is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and QUEEN S go up and down completely randomly.

Pair Corralation between ZURICH INSURANCE and QUEEN S

Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.13 times more return on investment than QUEEN S. However, ZURICH INSURANCE GROUP is 7.68 times less risky than QUEEN S. It trades about -0.22 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about -0.04 per unit of risk. If you would invest  2,920  in ZURICH INSURANCE GROUP on September 23, 2024 and sell it today you would lose (100.00) from holding ZURICH INSURANCE GROUP or give up 3.42% of portfolio value over 90 days.

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

ZURICH INSURANCE GROUP  vs.  QUEEN S ROAD

ZURICH INSURANCE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZURICH INSURANCE GROUP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ZURICH INSURANCE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

QUEEN S ROAD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QUEEN S ROAD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, QUEEN S is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ZURICH INSURANCE and QUEEN S

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

The idea behind ZURICH INSURANCE GROUP and QUEEN S ROAD 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.