Correlation Between Bowhead Specialty and ProAssurance
Can any of the company-specific risk be diversified away by investing in both Bowhead Specialty and ProAssurance 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 ProAssurance 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 ProAssurance, you can compare the effects of market volatilities on Bowhead Specialty and ProAssurance 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 ProAssurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and ProAssurance.
Diversification Opportunities for Bowhead Specialty and ProAssurance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bowhead and ProAssurance is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and ProAssurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProAssurance 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 ProAssurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProAssurance has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and ProAssurance go up and down completely randomly.
Pair Corralation between Bowhead Specialty and ProAssurance
Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 0.82 times more return on investment than ProAssurance. However, Bowhead Specialty Holdings is 1.22 times less risky than ProAssurance. It trades about 0.09 of its potential returns per unit of risk. ProAssurance is currently generating about -0.01 per unit of risk. If you would invest 2,380 in Bowhead Specialty Holdings on November 2, 2024 and sell it today you would earn a total of 853.00 from holding Bowhead Specialty Holdings or generate 35.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 35.02% |
| Values | Daily Returns |
Bowhead Specialty Holdings vs. ProAssurance
Performance |
| Timeline |
| Bowhead Specialty |
| ProAssurance |
Bowhead Specialty and ProAssurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowhead Specialty and ProAssurance
The main advantage of trading using opposite Bowhead Specialty and ProAssurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowhead Specialty position performs unexpectedly, ProAssurance 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 ProAssurance will offset losses from the drop in ProAssurance's long position.| Bowhead Specialty vs. American Environmental | Bowhead Specialty vs. HUHUTECH International Group | Bowhead Specialty vs. United States Steel | Bowhead Specialty vs. Nippon Steel Corp |
| ProAssurance vs. Argo Group International | ProAssurance vs. Horace Mann Educators | ProAssurance vs. Kemper | ProAssurance vs. Selective Insurance Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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