Correlation Between Donegal Group and Global Indemnity
Can any of the company-specific risk be diversified away by investing in both Donegal Group and Global Indemnity 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 Donegal Group and Global Indemnity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Donegal Group A and Global Indemnity PLC, you can compare the effects of market volatilities on Donegal Group and Global Indemnity 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 Donegal Group with a short position of Global Indemnity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Group and Global Indemnity.
Diversification Opportunities for Donegal Group and Global Indemnity
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Donegal and Global is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Group A and Global Indemnity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Indemnity PLC and Donegal Group 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 Donegal Group A are associated (or correlated) with Global Indemnity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Indemnity PLC has no effect on the direction of Donegal Group i.e., Donegal Group and Global Indemnity go up and down completely randomly.
Pair Corralation between Donegal Group and Global Indemnity
Assuming the 90 days horizon Donegal Group A is expected to generate 0.53 times more return on investment than Global Indemnity. However, Donegal Group A is 1.89 times less risky than Global Indemnity. It trades about -0.19 of its potential returns per unit of risk. Global Indemnity PLC is currently generating about -0.1 per unit of risk. If you would invest 1,524 in Donegal Group A on November 2, 2024 and sell it today you would lose (64.00) from holding Donegal Group A or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Donegal Group A vs. Global Indemnity PLC
Performance |
| Timeline |
| Donegal Group A |
| Global Indemnity PLC |
Donegal Group and Global Indemnity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Donegal Group and Global Indemnity
The main advantage of trading using opposite Donegal Group and Global Indemnity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donegal Group position performs unexpectedly, Global Indemnity 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 Global Indemnity will offset losses from the drop in Global Indemnity's long position.| Donegal Group vs. NI Holdings | Donegal Group vs. Horace Mann Educators | Donegal Group vs. Global Indemnity PLC | Donegal Group vs. Selective Insurance Group |
| Global Indemnity vs. Selective Insurance Group | Global Indemnity vs. Kemper | Global Indemnity vs. Donegal Group B | Global Indemnity vs. Argo Group International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |