Correlation Between Citizens and Brown Brown
Can any of the company-specific risk be diversified away by investing in both Citizens and Brown Brown 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 Citizens and Brown Brown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Brown Brown, you can compare the effects of market volatilities on Citizens and Brown Brown 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 Citizens with a short position of Brown Brown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Brown Brown.
Diversification Opportunities for Citizens and Brown Brown
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and Brown is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown and Citizens 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 Citizens are associated (or correlated) with Brown Brown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Brown has no effect on the direction of Citizens i.e., Citizens and Brown Brown go up and down completely randomly.
Pair Corralation between Citizens and Brown Brown
Considering the 90-day investment horizon Citizens is expected to under-perform the Brown Brown. In addition to that, Citizens is 3.08 times more volatile than Brown Brown. It trades about -0.06 of its total potential returns per unit of risk. Brown Brown is currently generating about 0.33 per unit of volatility. If you would invest 10,449 in Brown Brown on September 1, 2024 and sell it today you would earn a total of 861.00 from holding Brown Brown or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Brown Brown
Performance |
| Timeline |
| Citizens |
| Brown Brown |
Citizens and Brown Brown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Brown Brown
The main advantage of trading using opposite Citizens and Brown Brown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, Brown Brown 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 Brown Brown will offset losses from the drop in Brown Brown's long position.| Citizens vs. Aflac Incorporated | Citizens vs. Jackson Financial | Citizens vs. Globe Life | Citizens vs. CNO Financial Group |
| Brown Brown vs. Marsh McLennan Companies | Brown Brown vs. Aon PLC | Brown Brown vs. Willis Towers Watson | Brown Brown vs. Erie Indemnity |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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