Correlation Between Bowhead Specialty and Life Insurance
Can any of the company-specific risk be diversified away by investing in both Bowhead Specialty and Life 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 Bowhead Specialty and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowhead Specialty Holdings and Life Insurance, you can compare the effects of market volatilities on Bowhead Specialty and Life 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 Bowhead Specialty with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and Life Insurance.
Diversification Opportunities for Bowhead Specialty and Life Insurance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bowhead and Life is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and Life Insurance go up and down completely randomly.
Pair Corralation between Bowhead Specialty and Life Insurance
Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 0.93 times more return on investment than Life Insurance. However, Bowhead Specialty Holdings is 1.07 times less risky than Life Insurance. It trades about 0.09 of its potential returns per unit of risk. Life Insurance is currently generating about -0.07 per unit of risk. If you would invest 2,380 in Bowhead Specialty Holdings on October 27, 2024 and sell it today you would earn a total of 798.00 from holding Bowhead Specialty Holdings or generate 33.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 53.0% |
| Values | Daily Returns |
Bowhead Specialty Holdings vs. Life Insurance
Performance |
| Timeline |
| Bowhead Specialty |
| Life Insurance |
Bowhead Specialty and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowhead Specialty and Life Insurance
The main advantage of trading using opposite Bowhead Specialty and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowhead Specialty position performs unexpectedly, Life 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| Bowhead Specialty vs. EastGroup Properties | Bowhead Specialty vs. East Africa Metals | Bowhead Specialty vs. Deluxe | Bowhead Specialty vs. Udemy Inc |
| Life Insurance vs. Brandywine Realty Trust | Life Insurance vs. Naked Wines plc | Life Insurance vs. SNDL Inc | Life Insurance vs. Oasis Hotel Resort |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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