Correlation Between Kinsale Capital and Travelers Companies
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital and Travelers Companies 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 Kinsale Capital and Travelers Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsale Capital Group and The Travelers Companies, you can compare the effects of market volatilities on Kinsale Capital and Travelers Companies 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 Kinsale Capital with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Travelers Companies.
Diversification Opportunities for Kinsale Capital and Travelers Companies
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinsale and Travelers is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies and Kinsale Capital 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 Kinsale Capital Group are associated (or correlated) with Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Travelers Companies go up and down completely randomly.
Pair Corralation between Kinsale Capital and Travelers Companies
Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 1.81 times more return on investment than Travelers Companies. However, Kinsale Capital is 1.81 times more volatile than The Travelers Companies. It trades about 0.06 of its potential returns per unit of risk. The Travelers Companies is currently generating about 0.06 per unit of risk. If you would invest 28,342 in Kinsale Capital Group on August 31, 2024 and sell it today you would earn a total of 23,203 from holding Kinsale Capital Group or generate 81.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsale Capital Group vs. The Travelers Companies
Performance |
| Timeline |
| Kinsale Capital Group |
| The Travelers Companies |
Kinsale Capital and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Travelers Companies
The main advantage of trading using opposite Kinsale Capital and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. The Allstate | Travelers Companies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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