Correlation Between Donegal Group and W R
Can any of the company-specific risk be diversified away by investing in both Donegal Group and W R 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 W R 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 W R Berkley, you can compare the effects of market volatilities on Donegal Group and W R 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 W R. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Group and W R.
Diversification Opportunities for Donegal Group and W R
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Donegal and WRB-PE is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Group A and W R Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W R Berkley 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 W R. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W R Berkley has no effect on the direction of Donegal Group i.e., Donegal Group and W R go up and down completely randomly.
Pair Corralation between Donegal Group and W R
Assuming the 90 days horizon Donegal Group A is expected to generate 4.5 times more return on investment than W R. However, Donegal Group is 4.5 times more volatile than W R Berkley. It trades about 0.21 of its potential returns per unit of risk. W R Berkley is currently generating about -0.08 per unit of risk. If you would invest 1,437 in Donegal Group A on August 24, 2024 and sell it today you would earn a total of 157.00 from holding Donegal Group A or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Donegal Group A vs. W R Berkley
Performance |
| Timeline |
| Donegal Group A |
| W R Berkley |
Donegal Group and W R Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Donegal Group and W R
The main advantage of trading using opposite Donegal Group and W R positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donegal Group position performs unexpectedly, W R 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 W R will offset losses from the drop in W R'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 |
| W R vs. Aspen Insurance Holdings | W R vs. Aspen Insurance Holdings | W R vs. Argo Group International | W R vs. AmTrust Financial Services |
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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