Correlation Between Old Republic and Enstar Group
Can any of the company-specific risk be diversified away by investing in both Old Republic and Enstar 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 Old Republic and Enstar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Enstar Group Limited, you can compare the effects of market volatilities on Old Republic and Enstar 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 Old Republic with a short position of Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Enstar Group.
Diversification Opportunities for Old Republic and Enstar Group
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Old and Enstar is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Enstar Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group Limited and Old Republic 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 Old Republic International are associated (or correlated) with Enstar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enstar Group Limited has no effect on the direction of Old Republic i.e., Old Republic and Enstar Group go up and down completely randomly.
Pair Corralation between Old Republic and Enstar Group
Considering the 90-day investment horizon Old Republic International is expected to generate 5.08 times more return on investment than Enstar Group. However, Old Republic is 5.08 times more volatile than Enstar Group Limited. It trades about 0.21 of its potential returns per unit of risk. Enstar Group Limited is currently generating about -0.04 per unit of risk. If you would invest 3,579 in Old Republic International on August 24, 2024 and sell it today you would earn a total of 243.00 from holding Old Republic International or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Enstar Group Limited
Performance |
| Timeline |
| Old Republic Interna |
| Enstar Group Limited |
Old Republic and Enstar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Enstar Group
The main advantage of trading using opposite Old Republic and Enstar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic position performs unexpectedly, Enstar 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 Enstar Group will offset losses from the drop in Enstar Group's long position.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| Enstar Group vs. Global Indemnity PLC | Enstar Group vs. Erie Indemnity | Enstar Group vs. AMERISAFE | Enstar Group vs. Diamond Hill Investment |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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