Correlation Between Zurich Insurance and Banque Cantonale

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

Diversification Opportunities for Zurich Insurance and Banque Cantonale

-0.78

Correlation Coefficient

Zurich Insurance  Banque Cantonale

Pay attention - limited upside

The 3 months correlation between Zurich and Banque is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Banque Cantonale du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale 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 Banque Cantonale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque Cantonale has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Banque Cantonale go up and down completely randomly.

Pair Corralation between Zurich Insurance and Banque Cantonale

Assuming the 90 days trading horizon Zurich Insurance Group is expected to under-perform the Banque Cantonale. In addition to that, Zurich Insurance is 1.08 times more volatile than Banque Cantonale du. It trades about -0.08 of its total potential returns per unit of risk. Banque Cantonale du is currently generating about 0.0 per unit of volatility. If you would invest  11,100  in Banque Cantonale du on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Banque Cantonale du or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Zurich Insurance Group  vs.  Banque Cantonale du

Zurich Insurance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Zurich Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Banque Cantonale

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banque Cantonale du has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Banque Cantonale is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Zurich Insurance and Banque Cantonale

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

The idea behind Zurich Insurance Group and Banque Cantonale du 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.