Correlation Between LIFENET INSURANCE and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Zurich Insurance 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 LIFENET INSURANCE and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Zurich Insurance Group, you can compare the effects of market volatilities on LIFENET INSURANCE and Zurich Insurance 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 LIFENET INSURANCE with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Zurich Insurance.
Diversification Opportunities for LIFENET INSURANCE and Zurich Insurance
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LIFENET and Zurich is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and LIFENET 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 LIFENET INSURANCE CO are associated (or correlated) with Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Zurich Insurance go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Zurich Insurance
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 1.33 times more return on investment than Zurich Insurance. However, LIFENET INSURANCE is 1.33 times more volatile than Zurich Insurance Group. It trades about 0.1 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.04 per unit of risk. If you would invest 800.00 in LIFENET INSURANCE CO on February 17, 2024 and sell it today you would earn a total of 25.00 from holding LIFENET INSURANCE CO or generate 3.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LIFENET INSURANCE CO vs. Zurich Insurance Group
Performance |
Timeline |
LIFENET INSURANCE |
Zurich Insurance |
LIFENET INSURANCE and Zurich Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LIFENET INSURANCE and Zurich Insurance
The main advantage of trading using opposite LIFENET INSURANCE and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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