Correlation Between James River and Trisura Group
Can any of the company-specific risk be diversified away by investing in both James River and Trisura 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 James River and Trisura Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James River Group and Trisura Group, you can compare the effects of market volatilities on James River and Trisura 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 James River with a short position of Trisura Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of James River and Trisura Group.
Diversification Opportunities for James River and Trisura Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Trisura is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding James River Group and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group and James River 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 James River Group are associated (or correlated) with Trisura Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of James River i.e., James River and Trisura Group go up and down completely randomly.
Pair Corralation between James River and Trisura Group
Given the investment horizon of 90 days James River Group is expected to under-perform the Trisura Group. In addition to that, James River is 2.83 times more volatile than Trisura Group. It trades about -0.18 of its total potential returns per unit of risk. Trisura Group is currently generating about -0.03 per unit of volatility. If you would invest 2,935 in Trisura Group on September 1, 2024 and sell it today you would lose (51.00) from holding Trisura Group or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
James River Group vs. Trisura Group
Performance |
| Timeline |
| James River Group |
| Trisura Group |
James River and Trisura Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James River and Trisura Group
The main advantage of trading using opposite James River and Trisura Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James River position performs unexpectedly, Trisura 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 Trisura Group will offset losses from the drop in Trisura Group's long position.| James River vs. Employers Holdings | James River vs. Investors Title | James River vs. AMERISAFE | James River vs. Essent Group |
| Trisura Group vs. James River Group | Trisura Group vs. ICC Holdings | Trisura Group vs. AMERISAFE | Trisura Group vs. Employers Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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