Correlation Between Donegal Group and Chubb
Can any of the company-specific risk be diversified away by investing in both Donegal Group and Chubb 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 Chubb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Donegal Group B and Chubb, you can compare the effects of market volatilities on Donegal Group and Chubb 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 Chubb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Group and Chubb.
Diversification Opportunities for Donegal Group and Chubb
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Donegal and Chubb is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Group B and Chubb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb 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 B are associated (or correlated) with Chubb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chubb has no effect on the direction of Donegal Group i.e., Donegal Group and Chubb go up and down completely randomly.
Pair Corralation between Donegal Group and Chubb
Assuming the 90 days horizon Donegal Group B is expected to under-perform the Chubb. In addition to that, Donegal Group is 3.19 times more volatile than Chubb. It trades about -0.04 of its total potential returns per unit of risk. Chubb is currently generating about -0.06 per unit of volatility. If you would invest 29,002 in Chubb on August 28, 2024 and sell it today you would lose (360.00) from holding Chubb or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Donegal Group B vs. Chubb
Performance |
| Timeline |
| Donegal Group B |
| Chubb |
Donegal Group and Chubb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Donegal Group and Chubb
The main advantage of trading using opposite Donegal Group and Chubb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donegal Group position performs unexpectedly, Chubb 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 Chubb will offset losses from the drop in Chubb's long position.| Donegal Group vs. Horace Mann Educators | Donegal Group vs. United Fire Group | Donegal Group vs. Donegal Group A | Donegal Group vs. Global Indemnity PLC |
| Chubb vs. Cincinnati Financial | Chubb vs. Aflac Incorporated | Chubb vs. Dover | Chubb vs. Franklin Resources |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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