Correlation Between Haier Smart and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Selective 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 Haier Smart and Selective Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and Selective Insurance Group, you can compare the effects of market volatilities on Haier Smart and Selective 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 Haier Smart with a short position of Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Selective Insurance.
Diversification Opportunities for Haier Smart and Selective Insurance
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haier and Selective is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and Haier Smart 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 Haier Smart Home are associated (or correlated) with Selective Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selective Insurance has no effect on the direction of Haier Smart i.e., Haier Smart and Selective Insurance go up and down completely randomly.
Pair Corralation between Haier Smart and Selective Insurance
Assuming the 90 days trading horizon Haier Smart Home is expected to under-perform the Selective Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Haier Smart Home is 1.24 times less risky than Selective Insurance. The stock trades about -0.06 of its potential returns per unit of risk. The Selective Insurance Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 8,167 in Selective Insurance Group on August 31, 2024 and sell it today you would earn a total of 1,133 from holding Selective Insurance Group or generate 13.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. Selective Insurance Group
Performance |
| Timeline |
| Haier Smart Home |
| Selective Insurance |
Haier Smart and Selective Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Selective Insurance
The main advantage of trading using opposite Haier Smart and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Selective 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 Selective Insurance will offset losses from the drop in Selective Insurance's long position.| Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc | Haier Smart vs. Apple Inc |
| Selective Insurance vs. CHINA EDUCATION GROUP | Selective Insurance vs. Grand Canyon Education | Selective Insurance vs. Adtalem Global Education | Selective Insurance vs. DOCDATA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |