Correlation Between Argo Group and Horace Mann
Can any of the company-specific risk be diversified away by investing in both Argo Group and Horace Mann 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 Argo Group and Horace Mann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group International and Horace Mann Educators, you can compare the effects of market volatilities on Argo Group and Horace Mann 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 Argo Group with a short position of Horace Mann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Horace Mann.
Diversification Opportunities for Argo Group and Horace Mann
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Argo and Horace is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group International and Horace Mann Educators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horace Mann Educators and Argo Group 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 Argo Group International are associated (or correlated) with Horace Mann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horace Mann Educators has no effect on the direction of Argo Group i.e., Argo Group and Horace Mann go up and down completely randomly.
Pair Corralation between Argo Group and Horace Mann
Assuming the 90 days trading horizon Argo Group is expected to generate 1.8 times less return on investment than Horace Mann. But when comparing it to its historical volatility, Argo Group International is 3.93 times less risky than Horace Mann. It trades about 0.12 of its potential returns per unit of risk. Horace Mann Educators is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,397 in Horace Mann Educators on December 16, 2024 and sell it today you would earn a total of 797.00 from holding Horace Mann Educators or generate 23.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Group International vs. Horace Mann Educators
Performance |
| Timeline |
| Argo Group International |
| Horace Mann Educators |
Argo Group and Horace Mann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and Horace Mann
The main advantage of trading using opposite Argo Group and Horace Mann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, Horace Mann 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 Horace Mann will offset losses from the drop in Horace Mann's long position.| Argo Group vs. Iridium Communications | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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