Correlation Between Conifer Holding and Donegal Group
Can any of the company-specific risk be diversified away by investing in both Conifer Holding and Donegal Group 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 Conifer Holding and Donegal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conifer Holding and Donegal Group A, you can compare the effects of market volatilities on Conifer Holding and Donegal Group 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 Conifer Holding with a short position of Donegal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifer Holding and Donegal Group.
Diversification Opportunities for Conifer Holding and Donegal Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Conifer and Donegal is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Conifer Holding and Donegal Group A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Group A and Conifer Holding 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 Conifer Holding are associated (or correlated) with Donegal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Group A has no effect on the direction of Conifer Holding i.e., Conifer Holding and Donegal Group go up and down completely randomly.
Pair Corralation between Conifer Holding and Donegal Group
Given the investment horizon of 90 days Conifer Holding is expected to generate 5.8 times more return on investment than Donegal Group. However, Conifer Holding is 5.8 times more volatile than Donegal Group A. It trades about 0.04 of its potential returns per unit of risk. Donegal Group A is currently generating about 0.05 per unit of risk. If you would invest 115.00 in Conifer Holding on August 25, 2024 and sell it today you would earn a total of 4.00 from holding Conifer Holding or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.79% |
| Values | Daily Returns |
Conifer Holding vs. Donegal Group A
Performance |
| Timeline |
| Conifer Holding |
| Donegal Group A |
Conifer Holding and Donegal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conifer Holding and Donegal Group
The main advantage of trading using opposite Conifer Holding and Donegal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conifer Holding position performs unexpectedly, Donegal Group 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 Donegal Group will offset losses from the drop in Donegal Group's long position.| Conifer Holding vs. Wilhelmina | Conifer Holding vs. Unico American | Conifer Holding vs. Creative Media Community | Conifer Holding vs. Kingstone Companies |
| Donegal Group vs. NI Holdings | Donegal Group vs. Horace Mann Educators | Donegal Group vs. Global Indemnity PLC | Donegal Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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