Correlation Between NAKED WINES and ZURICH INSURANCE

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NAKED WINES 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 NAKED WINES and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAKED WINES PLC and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and ZURICH INSURANCE.

Diversification Opportunities for NAKED WINES and ZURICH INSURANCE

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between NAKED and ZURICH is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and ZURICH INSURANCE go up and down completely randomly.

Pair Corralation between NAKED WINES and ZURICH INSURANCE

Assuming the 90 days horizon NAKED WINES PLC is expected to generate 3.32 times more return on investment than ZURICH INSURANCE. However, NAKED WINES is 3.32 times more volatile than ZURICH INSURANCE GROUP. It trades about 0.07 of its potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about 0.11 per unit of risk. If you would invest  33.00  in NAKED WINES PLC on September 6, 2024 and sell it today you would earn a total of  26.00  from holding NAKED WINES PLC or generate 78.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.63%
ValuesDaily Returns

NAKED WINES PLC  vs.  ZURICH INSURANCE GROUP

 Performance 
       Timeline  
NAKED WINES PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NAKED WINES PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NAKED WINES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
ZURICH INSURANCE 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in ZURICH INSURANCE GROUP are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ZURICH INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

NAKED WINES and ZURICH INSURANCE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NAKED WINES and ZURICH INSURANCE

The main advantage of trading using opposite NAKED WINES and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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.
The idea behind NAKED WINES PLC and ZURICH INSURANCE GROUP 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Bonds Directory
Find actively traded corporate debentures issued by US companies