Correlation Between Palomar Holdings and Argo Group
Can any of the company-specific risk be diversified away by investing in both Palomar Holdings and Argo 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 Palomar Holdings and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palomar Holdings and Argo Group International, you can compare the effects of market volatilities on Palomar Holdings and Argo 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 Palomar Holdings with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palomar Holdings and Argo Group.
Diversification Opportunities for Palomar Holdings and Argo Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Palomar and Argo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Palomar Holdings and Argo Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group International and Palomar Holdings 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 Palomar Holdings are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group International has no effect on the direction of Palomar Holdings i.e., Palomar Holdings and Argo Group go up and down completely randomly.
Pair Corralation between Palomar Holdings and Argo Group
Given the investment horizon of 90 days Palomar Holdings is expected to generate 7.41 times more return on investment than Argo Group. However, Palomar Holdings is 7.41 times more volatile than Argo Group International. It trades about 0.48 of its potential returns per unit of risk. Argo Group International is currently generating about 0.23 per unit of risk. If you would invest 8,838 in Palomar Holdings on September 2, 2024 and sell it today you would earn a total of 1,992 from holding Palomar Holdings or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palomar Holdings vs. Argo Group International
Performance |
| Timeline |
| Palomar Holdings |
| Argo Group International |
Palomar Holdings and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palomar Holdings and Argo Group
The main advantage of trading using opposite Palomar Holdings and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palomar Holdings position performs unexpectedly, Argo 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 Argo Group will offset losses from the drop in Argo Group's long position.| Palomar Holdings vs. Horace Mann Educators | Palomar Holdings vs. Kemper | Palomar Holdings vs. RLI Corp | Palomar Holdings vs. Global Indemnity PLC |
| Argo Group vs. Loews Corp | Argo Group vs. Chubb | Argo Group vs. American Financial Group | Argo Group vs. The Allstate |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |