Correlation Between Horace Mann and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both Horace Mann and Selective Insurance 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 Horace Mann and Selective Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horace Mann Educators and Selective Insurance Group, you can compare the effects of market volatilities on Horace Mann and Selective Insurance 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 Horace Mann with a short position of Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horace Mann and Selective Insurance.
Diversification Opportunities for Horace Mann and Selective Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Horace and Selective is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Horace Mann Educators and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and Horace Mann 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 Horace Mann Educators are associated (or correlated) with Selective Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selective Insurance has no effect on the direction of Horace Mann i.e., Horace Mann and Selective Insurance go up and down completely randomly.
Pair Corralation between Horace Mann and Selective Insurance
Considering the 90-day investment horizon Horace Mann Educators is expected to generate 1.4 times more return on investment than Selective Insurance. However, Horace Mann is 1.4 times more volatile than Selective Insurance Group. It trades about 0.03 of its potential returns per unit of risk. Selective Insurance Group is currently generating about 0.04 per unit of risk. If you would invest 3,451 in Horace Mann Educators on August 24, 2024 and sell it today you would earn a total of 692.00 from holding Horace Mann Educators or generate 20.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horace Mann Educators vs. Selective Insurance Group
Performance |
| Timeline |
| Horace Mann Educators |
| Selective Insurance |
Horace Mann and Selective Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horace Mann and Selective Insurance
The main advantage of trading using opposite Horace Mann and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horace Mann position performs unexpectedly, Selective Insurance 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 Selective Insurance will offset losses from the drop in Selective Insurance's long position.| Horace Mann vs. Kemper | Horace Mann vs. RLI Corp | Horace Mann vs. Global Indemnity PLC | Horace Mann vs. Argo Group International |
| Selective Insurance vs. Brighthouse Financial | Selective Insurance vs. First Citizens BancShares | Selective Insurance vs. Northern Trust | Selective Insurance vs. Dime Community Bancshares |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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