Correlation Between Old Republic and WR Berkley
Can any of the company-specific risk be diversified away by investing in both Old Republic and WR Berkley 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 WR Berkley 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 WR Berkley, you can compare the effects of market volatilities on Old Republic and WR Berkley 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 WR Berkley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and WR Berkley.
Diversification Opportunities for Old Republic and WR Berkley
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Old and WRB-PH is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and WR Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WR Berkley 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 WR Berkley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WR Berkley has no effect on the direction of Old Republic i.e., Old Republic and WR Berkley go up and down completely randomly.
Pair Corralation between Old Republic and WR Berkley
Considering the 90-day investment horizon Old Republic International is expected to generate 1.2 times more return on investment than WR Berkley. However, Old Republic is 1.2 times more volatile than WR Berkley. It trades about 0.12 of its potential returns per unit of risk. WR Berkley is currently generating about 0.03 per unit of risk. If you would invest 2,824 in Old Republic International on September 2, 2024 and sell it today you would earn a total of 1,073 from holding Old Republic International or generate 38.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. WR Berkley
Performance |
| Timeline |
| Old Republic Interna |
| WR Berkley |
Old Republic and WR Berkley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and WR Berkley
The main advantage of trading using opposite Old Republic and WR Berkley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic position performs unexpectedly, WR Berkley 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 WR Berkley will offset losses from the drop in WR Berkley'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 |
| WR Berkley vs. Aspen Insurance Holdings | WR Berkley vs. Selective Insurance Group | WR Berkley vs. Aspen Insurance Holdings | WR Berkley vs. AmTrust Financial Services |
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 Stocks Directory module to find actively traded stocks across global markets.
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