Correlation Between Global Indemnity and Kemper
Can any of the company-specific risk be diversified away by investing in both Global Indemnity and Kemper 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 Global Indemnity and Kemper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Indemnity PLC and Kemper, you can compare the effects of market volatilities on Global Indemnity and Kemper 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 Global Indemnity with a short position of Kemper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Indemnity and Kemper.
Diversification Opportunities for Global Indemnity and Kemper
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Kemper is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global Indemnity PLC and Kemper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kemper and Global Indemnity 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 Global Indemnity PLC are associated (or correlated) with Kemper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kemper has no effect on the direction of Global Indemnity i.e., Global Indemnity and Kemper go up and down completely randomly.
Pair Corralation between Global Indemnity and Kemper
Given the investment horizon of 90 days Global Indemnity is expected to generate 3.49 times less return on investment than Kemper. But when comparing it to its historical volatility, Global Indemnity PLC is 1.49 times less risky than Kemper. It trades about 0.16 of its potential returns per unit of risk. Kemper is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 6,406 in Kemper on August 27, 2024 and sell it today you would earn a total of 789.00 from holding Kemper or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Indemnity PLC vs. Kemper
Performance |
| Timeline |
| Global Indemnity PLC |
| Kemper |
Global Indemnity and Kemper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Indemnity and Kemper
The main advantage of trading using opposite Global Indemnity and Kemper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Indemnity position performs unexpectedly, Kemper 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 Kemper will offset losses from the drop in Kemper's long position.| Global Indemnity vs. Fiverr International | Global Indemnity vs. Pinterest | Global Indemnity vs. Upstart Holdings | Global Indemnity vs. Fastly Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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