Correlation Between Donegal Group and Root
Can any of the company-specific risk be diversified away by investing in both Donegal Group and Root 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 Root 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 Root Inc, you can compare the effects of market volatilities on Donegal Group and Root 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 Root. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Group and Root.
Diversification Opportunities for Donegal Group and Root
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Donegal and Root is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Group B and Root Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Root Inc 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 Root. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Root Inc has no effect on the direction of Donegal Group i.e., Donegal Group and Root go up and down completely randomly.
Pair Corralation between Donegal Group and Root
Assuming the 90 days horizon Donegal Group is expected to generate 835.07 times less return on investment than Root. But when comparing it to its historical volatility, Donegal Group B is 5.1 times less risky than Root. It trades about 0.0 of its potential returns per unit of risk. Root Inc is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 4,049 in Root Inc on August 31, 2024 and sell it today you would earn a total of 5,857 from holding Root Inc or generate 144.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 81.82% |
| Values | Daily Returns |
Donegal Group B vs. Root Inc
Performance |
| Timeline |
| Donegal Group B |
| Root Inc |
Donegal Group and Root Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Donegal Group and Root
The main advantage of trading using opposite Donegal Group and Root positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donegal Group position performs unexpectedly, Root 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 Root will offset losses from the drop in Root's long position.| Donegal Group vs. Progressive Corp | Donegal Group vs. Chubb | Donegal Group vs. The Allstate | Donegal Group vs. CNA Financial |
| Root vs. Selective Insurance Group | Root vs. Donegal Group B | Root vs. Horace Mann Educators | Root vs. Global Indemnity PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |