Correlation Between Zurich Insurance and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on Zurich Insurance and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Westpac Banking.
Diversification Opportunities for Zurich Insurance and Westpac Banking
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zurich and Westpac is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Westpac Banking go up and down completely randomly.
Pair Corralation between Zurich Insurance and Westpac Banking
Assuming the 90 days horizon Zurich Insurance Group is expected to under-perform the Westpac Banking. But the otc stock apears to be less risky and, when comparing its historical volatility, Zurich Insurance Group is 1.15 times less risky than Westpac Banking. The otc stock trades about -0.02 of its potential returns per unit of risk. The Westpac Banking is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,340 in Westpac Banking on August 28, 2025 and sell it today you would earn a total of 110.00 from holding Westpac Banking or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Westpac Banking
Performance |
| Timeline |
| Zurich Insurance |
| Westpac Banking |
Zurich Insurance and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Westpac Banking
The main advantage of trading using opposite Zurich Insurance and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Zurich Insurance vs. Finnair Oyj | Zurich Insurance vs. Electreon Wireless | Zurich Insurance vs. Slate Office REIT | Zurich Insurance vs. Avecho Biotechnology Limited |
| Westpac Banking vs. Hunter Creek Mining | Westpac Banking vs. ScanSource | Westpac Banking vs. Mineral Mountain Mining | Westpac Banking vs. GoldQuest Mining Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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