Correlation Between Zurich Insurance and Helvetia Holding

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

Diversification Opportunities for Zurich Insurance and Helvetia Holding

0.15

Correlation Coefficient

Zurich Insurance  Helvetia Holding

Average diversification

The 3 months correlation between Zurich and Helvetia is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Helvetia Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helvetia Holding 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 Helvetia Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helvetia Holding has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Helvetia Holding go up and down completely randomly.

Pair Corralation between Zurich Insurance and Helvetia Holding

Assuming the 90 days trading horizon Zurich Insurance Group is expected to under-perform the Helvetia Holding. But the stock apears to be less risky and, when comparing its historical volatility, Zurich Insurance Group is 1.29 times less risky than Helvetia Holding. The stock trades about -0.02 of its potential returns per unit of risk. The Helvetia Holding AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  17,781  in Helvetia Holding AG on April 23, 2025 and sell it today you would earn a total of  1,789  from holding Helvetia Holding AG or generate 10.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Zurich Insurance Group  vs.  Helvetia Holding AG

Zurich Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zurich Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Zurich Insurance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Helvetia Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Helvetia Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Zurich Insurance and Helvetia Holding

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

The idea behind Zurich Insurance Group and Helvetia Holding AG 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.