Correlation Between PICC Property and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both PICC Property and Selective Insurance 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 PICC Property and Selective Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICC Property and and Selective Insurance Group, you can compare the effects of market volatilities on PICC Property and Selective Insurance 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 PICC Property with a short position of Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICC Property and Selective Insurance.
Diversification Opportunities for PICC Property and Selective Insurance
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PICC and Selective is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding PICC Property and and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and PICC Property 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 PICC Property and are associated (or correlated) with Selective Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selective Insurance has no effect on the direction of PICC Property i.e., PICC Property and Selective Insurance go up and down completely randomly.
Pair Corralation between PICC Property and Selective Insurance
Assuming the 90 days horizon PICC Property and is expected to generate 3.49 times more return on investment than Selective Insurance. However, PICC Property is 3.49 times more volatile than Selective Insurance Group. It trades about 0.14 of its potential returns per unit of risk. Selective Insurance Group is currently generating about 0.03 per unit of risk. If you would invest 51.00 in PICC Property and on August 30, 2024 and sell it today you would earn a total of 92.00 from holding PICC Property and or generate 180.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICC Property and vs. Selective Insurance Group
Performance |
| Timeline |
| PICC Property |
| Selective Insurance |
PICC Property and Selective Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICC Property and Selective Insurance
The main advantage of trading using opposite PICC Property and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICC Property position performs unexpectedly, Selective Insurance 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 Selective Insurance will offset losses from the drop in Selective Insurance's long position.| PICC Property vs. Nishi Nippon Railroad Co | PICC Property vs. SCANSOURCE | PICC Property vs. Entravision Communications | PICC Property vs. Gamma Communications plc |
| Selective Insurance vs. DICKS Sporting Goods | Selective Insurance vs. Singapore Telecommunications Limited | Selective Insurance vs. NTG Nordic Transport | Selective Insurance vs. SPORTING |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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