Correlation Between Heritage Insurance and ProAssurance
Can any of the company-specific risk be diversified away by investing in both Heritage Insurance and ProAssurance 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 ProAssurance 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 ProAssurance, you can compare the effects of market volatilities on Heritage Insurance and ProAssurance 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 ProAssurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Insurance and ProAssurance.
Diversification Opportunities for Heritage Insurance and ProAssurance
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heritage and ProAssurance is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Insurance Hldgs and ProAssurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProAssurance 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 ProAssurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProAssurance has no effect on the direction of Heritage Insurance i.e., Heritage Insurance and ProAssurance go up and down completely randomly.
Pair Corralation between Heritage Insurance and ProAssurance
Given the investment horizon of 90 days Heritage Insurance Hldgs is expected to generate 1.18 times more return on investment than ProAssurance. However, Heritage Insurance is 1.18 times more volatile than ProAssurance. It trades about 0.25 of its potential returns per unit of risk. ProAssurance is currently generating about 0.14 per unit of risk. If you would invest 1,059 in Heritage Insurance Hldgs on August 28, 2024 and sell it today you would earn a total of 184.00 from holding Heritage Insurance Hldgs or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage Insurance Hldgs vs. ProAssurance
Performance |
| Timeline |
| Heritage Insurance Hldgs |
| ProAssurance |
Heritage Insurance and ProAssurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Insurance and ProAssurance
The main advantage of trading using opposite Heritage Insurance and ProAssurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Insurance position performs unexpectedly, ProAssurance 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 ProAssurance will offset losses from the drop in ProAssurance'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 |
| ProAssurance vs. Argo Group International | ProAssurance vs. Horace Mann Educators | ProAssurance vs. Kemper | ProAssurance 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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