Correlation Between Horace Mann and WR Berkley
Can any of the company-specific risk be diversified away by investing in both Horace Mann and WR Berkley 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 WR Berkley 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 WR Berkley, you can compare the effects of market volatilities on Horace Mann and WR Berkley 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 WR Berkley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horace Mann and WR Berkley.
Diversification Opportunities for Horace Mann and WR Berkley
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Horace and WRB-PH is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Horace Mann Educators and WR Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WR Berkley 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 WR Berkley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WR Berkley has no effect on the direction of Horace Mann i.e., Horace Mann and WR Berkley go up and down completely randomly.
Pair Corralation between Horace Mann and WR Berkley
Considering the 90-day investment horizon Horace Mann Educators is expected to generate 2.49 times more return on investment than WR Berkley. However, Horace Mann is 2.49 times more volatile than WR Berkley. It trades about 0.2 of its potential returns per unit of risk. WR Berkley is currently generating about -0.21 per unit of risk. If you would invest 3,764 in Horace Mann Educators on August 31, 2024 and sell it today you would earn a total of 420.00 from holding Horace Mann Educators or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horace Mann Educators vs. WR Berkley
Performance |
| Timeline |
| Horace Mann Educators |
| WR Berkley |
Horace Mann and WR Berkley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horace Mann and WR Berkley
The main advantage of trading using opposite Horace Mann and WR Berkley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horace Mann position performs unexpectedly, WR Berkley 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 WR Berkley will offset losses from the drop in WR Berkley's long position.| Horace Mann vs. Progressive Corp | Horace Mann vs. Chubb | Horace Mann vs. The Allstate | Horace Mann vs. CNA Financial |
| WR Berkley vs. Aspen Insurance Holdings | WR Berkley vs. Selective Insurance Group | WR Berkley vs. Aspen Insurance Holdings | WR Berkley vs. AmTrust Financial Services |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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