Correlation Between Zurich Insurance and Ageas SANV

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

Diversification Opportunities for Zurich Insurance and Ageas SANV

-0.39

Correlation Coefficient

Zurich Insurance  Ageas SANV

Very good diversification

The 3 months correlation between Zurich and Ageas is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ageas SANV 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 Ageas SANV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ageas SANV has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Ageas SANV go up and down completely randomly.

Pair Corralation between Zurich Insurance and Ageas SANV

Assuming the 90 days horizon Zurich Insurance Group is expected to generate 1.36 times more return on investment than Ageas SANV. However, Zurich Insurance is 1.36 times more volatile than ageas SANV. It trades about 0.05 of its potential returns per unit of risk. ageas SANV is currently generating about -0.04 per unit of risk. If you would invest  58,928  in Zurich Insurance Group on September 12, 2024 and sell it today you would earn a total of  2,624  from holding Zurich Insurance Group or generate 4.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Zurich Insurance Group  vs.  ageas SANV

Zurich Insurance

Risk-Adjusted Performance

4 of 100

Modest

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. Despite nearly stable basic indicators, Zurich Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ageas SANV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ageas SANV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ageas SANV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zurich Insurance and Ageas SANV

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

The idea behind Zurich Insurance Group and ageas SANV 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.