Correlation Between CRAWFORD + and Brown Brown
Can any of the company-specific risk be diversified away by investing in both CRAWFORD + 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 CRAWFORD + and Brown Brown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRAWFORD A NV and Brown Brown, you can compare the effects of market volatilities on CRAWFORD + 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 CRAWFORD + with a short position of Brown Brown. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRAWFORD + and Brown Brown.
Diversification Opportunities for CRAWFORD + and Brown Brown
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CRAWFORD and Brown is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CRAWFORD A NV and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown and CRAWFORD + 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 CRAWFORD A NV 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 CRAWFORD + i.e., CRAWFORD + and Brown Brown go up and down completely randomly.
Pair Corralation between CRAWFORD + and Brown Brown
Assuming the 90 days trading horizon CRAWFORD A NV is expected to generate 2.37 times more return on investment than Brown Brown. However, CRAWFORD + is 2.37 times more volatile than Brown Brown. It trades about -0.01 of its potential returns per unit of risk. Brown Brown is currently generating about -0.11 per unit of risk. If you would invest 1,050 in CRAWFORD A NV on October 11, 2024 and sell it today you would lose (10.00) from holding CRAWFORD A NV or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRAWFORD A NV vs. Brown Brown
Performance |
| Timeline |
| CRAWFORD A NV |
| Brown Brown |
CRAWFORD + and Brown Brown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRAWFORD + and Brown Brown
The main advantage of trading using opposite CRAWFORD + and Brown Brown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRAWFORD + 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.| CRAWFORD + vs. Brown Brown | CRAWFORD + vs. Sabre Insurance Group | CRAWFORD + vs. Superior Plus Corp | CRAWFORD + vs. NMI Holdings |
| Brown Brown vs. Sabre Insurance Group | Brown Brown vs. Superior Plus Corp | Brown Brown vs. NMI Holdings | Brown Brown vs. SIVERS SEMICONDUCTORS AB |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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