Correlation Between Heritage Insurance and Donegal Group
Can any of the company-specific risk be diversified away by investing in both Heritage Insurance and Donegal Group 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 Heritage Insurance and Donegal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Insurance Hldgs and Donegal Group A, you can compare the effects of market volatilities on Heritage Insurance and Donegal Group 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 Heritage Insurance with a short position of Donegal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Insurance and Donegal Group.
Diversification Opportunities for Heritage Insurance and Donegal Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heritage and Donegal is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Insurance Hldgs and Donegal Group A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Group A and Heritage Insurance 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 Heritage Insurance Hldgs are associated (or correlated) with Donegal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Group A has no effect on the direction of Heritage Insurance i.e., Heritage Insurance and Donegal Group go up and down completely randomly.
Pair Corralation between Heritage Insurance and Donegal Group
Given the investment horizon of 90 days Heritage Insurance Hldgs is expected to generate 3.19 times more return on investment than Donegal Group. However, Heritage Insurance is 3.19 times more volatile than Donegal Group A. It trades about 0.08 of its potential returns per unit of risk. Donegal Group A is currently generating about 0.04 per unit of risk. If you would invest 409.00 in Heritage Insurance Hldgs on August 29, 2024 and sell it today you would earn a total of 834.00 from holding Heritage Insurance Hldgs or generate 203.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage Insurance Hldgs vs. Donegal Group A
Performance |
| Timeline |
| Heritage Insurance Hldgs |
| Donegal Group A |
Heritage Insurance and Donegal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Insurance and Donegal Group
The main advantage of trading using opposite Heritage Insurance and Donegal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Insurance position performs unexpectedly, Donegal Group 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 Donegal Group will offset losses from the drop in Donegal Group's long position.| Heritage Insurance vs. Universal Insurance Holdings | Heritage Insurance vs. Donegal Group B | Heritage Insurance vs. Horace Mann Educators | Heritage Insurance vs. NI Holdings |
| Donegal Group vs. NI Holdings | Donegal Group vs. Horace Mann Educators | Donegal Group vs. Global Indemnity PLC | Donegal Group vs. Selective Insurance Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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