Correlation Between Kemper and Progressive Corp
Can any of the company-specific risk be diversified away by investing in both Kemper and Progressive Corp 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 Progressive Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemper and Progressive Corp, you can compare the effects of market volatilities on Kemper and Progressive Corp 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 Progressive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemper and Progressive Corp.
Diversification Opportunities for Kemper and Progressive Corp
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kemper and Progressive is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kemper and Progressive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Corp 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 Progressive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Corp has no effect on the direction of Kemper i.e., Kemper and Progressive Corp go up and down completely randomly.
Pair Corralation between Kemper and Progressive Corp
Given the investment horizon of 90 days Kemper is expected to generate 1.1 times less return on investment than Progressive Corp. In addition to that, Kemper is 1.63 times more volatile than Progressive Corp. It trades about 0.08 of its total potential returns per unit of risk. Progressive Corp is currently generating about 0.13 per unit of volatility. If you would invest 23,630 in Progressive Corp on October 23, 2024 and sell it today you would earn a total of 523.00 from holding Progressive Corp or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kemper vs. Progressive Corp
Performance |
| Timeline |
| Kemper |
| Progressive Corp |
Kemper and Progressive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemper and Progressive Corp
The main advantage of trading using opposite Kemper and Progressive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemper position performs unexpectedly, Progressive Corp 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 Progressive Corp will offset losses from the drop in Progressive Corp's long position.| Kemper vs. Selective Insurance Group | Kemper vs. Donegal Group B | Kemper vs. Argo Group International | Kemper vs. Global Indemnity PLC |
| Progressive Corp vs. The Travelers Companies | Progressive Corp vs. Chubb | Progressive Corp vs. Cincinnati Financial | Progressive Corp vs. W R Berkley |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Correlations Find global opportunities by holding instruments from different markets |