Correlation Between Helvetia Holding and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Helvetia Holding 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 Helvetia Holding and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helvetia Holding AG and Zurich Insurance Group, you can compare the effects of market volatilities on Helvetia Holding 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 Helvetia Holding with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Zurich Insurance.
Diversification Opportunities for Helvetia Holding and Zurich Insurance
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Helvetia and Zurich is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Helvetia Holding 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 Helvetia Holding AG 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 Helvetia Holding i.e., Helvetia Holding and Zurich Insurance go up and down completely randomly.
Pair Corralation between Helvetia Holding and Zurich Insurance
Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 1.34 times more return on investment than Zurich Insurance. However, Helvetia Holding is 1.34 times more volatile than Zurich Insurance Group. It trades about 0.12 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.15 per unit of risk. If you would invest 13,650 in Helvetia Holding AG on September 13, 2024 and sell it today you would earn a total of 1,150 from holding Helvetia Holding AG or generate 8.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Helvetia Holding AG vs. Zurich Insurance Group
Performance |
Timeline |
Helvetia Holding |
Zurich Insurance |
Helvetia Holding and Zurich Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Helvetia Holding and Zurich Insurance
The main advantage of trading using opposite Helvetia Holding and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding 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.Helvetia Holding vs. Swiss Life Holding | Helvetia Holding vs. Baloise Holding AG | Helvetia Holding vs. Swiss Re AG | Helvetia Holding vs. Zurich Insurance Group |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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