Correlation Between AAC TECHNOLOGHLDGADR and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR and Selective Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Selective Insurance Group, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR with a short position of Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Selective Insurance.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Selective Insurance
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AAC and Selective is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Selective Insurance go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Selective Insurance
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.82 times more return on investment than Selective Insurance. However, AAC TECHNOLOGHLDGADR is 1.82 times more volatile than Selective Insurance Group. It trades about 0.06 of its potential returns per unit of risk. Selective Insurance Group is currently generating about -0.01 per unit of risk. If you would invest 213.00 in AAC TECHNOLOGHLDGADR on November 5, 2024 and sell it today you would earn a total of 253.00 from holding AAC TECHNOLOGHLDGADR or generate 118.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Selective Insurance Group
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Selective Insurance |
AAC TECHNOLOGHLDGADR and Selective Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Selective Insurance
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR 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.| AAC TECHNOLOGHLDGADR vs. ADDUS HOMECARE | AAC TECHNOLOGHLDGADR vs. OFFICE DEPOT | AAC TECHNOLOGHLDGADR vs. The Home Depot | AAC TECHNOLOGHLDGADR vs. North American Construction |
| Selective Insurance vs. Air Lease | Selective Insurance vs. Global Ship Lease | Selective Insurance vs. WILLIS LEASE FIN | Selective Insurance vs. GigaMedia |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |