Correlation Between Global Indemnity and Loews Corp
Can any of the company-specific risk be diversified away by investing in both Global Indemnity and Loews Corp 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 Loews Corp 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 Loews Corp, you can compare the effects of market volatilities on Global Indemnity and Loews Corp 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 Loews Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Indemnity and Loews Corp.
Diversification Opportunities for Global Indemnity and Loews Corp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Loews is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global Indemnity PLC and Loews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loews Corp 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 Loews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews Corp has no effect on the direction of Global Indemnity i.e., Global Indemnity and Loews Corp go up and down completely randomly.
Pair Corralation between Global Indemnity and Loews Corp
Given the investment horizon of 90 days Global Indemnity PLC is expected to generate 41.02 times more return on investment than Loews Corp. However, Global Indemnity is 41.02 times more volatile than Loews Corp. It trades about 0.04 of its potential returns per unit of risk. Loews Corp is currently generating about 0.08 per unit of risk. If you would invest 2,297 in Global Indemnity PLC on August 23, 2024 and sell it today you would earn a total of 1,103 from holding Global Indemnity PLC or generate 48.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Global Indemnity PLC vs. Loews Corp
Performance |
| Timeline |
| Global Indemnity PLC |
| Loews Corp |
Global Indemnity and Loews Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Indemnity and Loews Corp
The main advantage of trading using opposite Global Indemnity and Loews Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Indemnity position performs unexpectedly, Loews Corp 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 Loews Corp will offset losses from the drop in Loews Corp's long position.| Global Indemnity vs. Selective Insurance Group | Global Indemnity vs. Kemper | Global Indemnity vs. Donegal Group B | Global Indemnity vs. Argo Group International |
| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
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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