Correlation Between Peoples Insurance and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Peoples Insurance and Superior Plus 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 Peoples Insurance and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Peoples Insurance and Superior Plus Corp, you can compare the effects of market volatilities on Peoples Insurance and Superior Plus 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 Peoples Insurance with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Superior Plus.
Diversification Opportunities for Peoples Insurance and Superior Plus
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Peoples and Superior is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Peoples Insurance and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Peoples Insurance 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 The Peoples Insurance are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Superior Plus go up and down completely randomly.
Pair Corralation between Peoples Insurance and Superior Plus
Assuming the 90 days horizon The Peoples Insurance is expected to generate 2.92 times more return on investment than Superior Plus. However, Peoples Insurance is 2.92 times more volatile than Superior Plus Corp. It trades about 0.15 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.07 per unit of risk. If you would invest 11.00 in The Peoples Insurance on September 3, 2024 and sell it today you would earn a total of 27.00 from holding The Peoples Insurance or generate 245.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Peoples Insurance vs. Superior Plus Corp
Performance |
| Timeline |
| Peoples Insurance |
| Superior Plus Corp |
Peoples Insurance and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Insurance and Superior Plus
The main advantage of trading using opposite Peoples Insurance and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Insurance position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Peoples Insurance vs. Loews Corp | Peoples Insurance vs. The Hanover Insurance | Peoples Insurance vs. Superior Plus Corp | Peoples Insurance vs. NMI Holdings |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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