Correlation Between Kemper and Argo Group
Can any of the company-specific risk be diversified away by investing in both Kemper and Argo 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 Kemper and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemper and Argo Group International, you can compare the effects of market volatilities on Kemper and Argo 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 Kemper with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemper and Argo Group.
Diversification Opportunities for Kemper and Argo Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kemper and Argo is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kemper and Argo Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group International and Kemper 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 Kemper are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group International has no effect on the direction of Kemper i.e., Kemper and Argo Group go up and down completely randomly.
Pair Corralation between Kemper and Argo Group
Given the investment horizon of 90 days Kemper is expected to generate 4.15 times more return on investment than Argo Group. However, Kemper is 4.15 times more volatile than Argo Group International. It trades about 0.05 of its potential returns per unit of risk. Argo Group International is currently generating about 0.12 per unit of risk. If you would invest 5,552 in Kemper on December 16, 2024 and sell it today you would earn a total of 1,303 from holding Kemper or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kemper vs. Argo Group International
Performance |
| Timeline |
| Kemper |
| Argo Group International |
Kemper and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemper and Argo Group
The main advantage of trading using opposite Kemper and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemper position performs unexpectedly, Argo 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 Argo Group will offset losses from the drop in Argo Group's long position.| Kemper vs. Selective Insurance Group | ||
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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