Correlation Between ZURICH INSURANCE and PLAYTECH

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

Diversification Opportunities for ZURICH INSURANCE and PLAYTECH

0.2

Correlation Coefficient

ZURICH INSURANCE  PLAYTECH

Modest diversification

The 3 months correlation between ZURICH and PLAYTECH is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and PLAYTECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTECH 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 PLAYTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTECH has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and PLAYTECH go up and down completely randomly.

Pair Corralation between ZURICH INSURANCE and PLAYTECH

Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate about the same return on investment as PLAYTECH. But, ZURICH INSURANCE GROUP is 1.97 times less risky than PLAYTECH. It trades about 0.07 of its potential returns per unit of risk. PLAYTECH is currently generating about 0.04 per unit of risk. If you would invest  650.00  in PLAYTECH on October 25, 2024 and sell it today you would earn a total of  221.00  from holding PLAYTECH or generate 34.0% return on investment over 90 days.

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

ZURICH INSURANCE GROUP  vs.  PLAYTECH

ZURICH INSURANCE

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZURICH INSURANCE GROUP are ranked lower than 4 (%) 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.

PLAYTECH

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ZURICH INSURANCE and PLAYTECH

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

The idea behind ZURICH INSURANCE GROUP and PLAYTECH 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.