Correlation Between ZURICH INSURANCE and NTG Nordic

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

Diversification Opportunities for ZURICH INSURANCE and NTG Nordic

-0.42

Correlation Coefficient

ZURICH INSURANCE  NTG Nordic

Very good diversification

The 3 months correlation between ZURICH and NTG is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and NTG Nordic go up and down completely randomly.

Pair Corralation between ZURICH INSURANCE and NTG Nordic

Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.43 times more return on investment than NTG Nordic. However, ZURICH INSURANCE GROUP is 2.35 times less risky than NTG Nordic. It trades about 0.07 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.01 per unit of risk. If you would invest  1,965  in ZURICH INSURANCE GROUP on October 2, 2024 and sell it today you would earn a total of  835.00  from holding ZURICH INSURANCE GROUP or generate 42.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

ZURICH INSURANCE GROUP  vs.  NTG Nordic Transport

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.

NTG Nordic Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NTG Nordic Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ZURICH INSURANCE and NTG Nordic

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

The idea behind ZURICH INSURANCE GROUP and NTG Nordic Transport 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.