Correlation Between ProAssurance and Chubb
Can any of the company-specific risk be diversified away by investing in both ProAssurance and Chubb 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 ProAssurance and Chubb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProAssurance and Chubb, you can compare the effects of market volatilities on ProAssurance and Chubb 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 ProAssurance with a short position of Chubb. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProAssurance and Chubb.
Diversification Opportunities for ProAssurance and Chubb
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ProAssurance and Chubb is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ProAssurance and Chubb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb and ProAssurance 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 ProAssurance are associated (or correlated) with Chubb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chubb has no effect on the direction of ProAssurance i.e., ProAssurance and Chubb go up and down completely randomly.
Pair Corralation between ProAssurance and Chubb
Considering the 90-day investment horizon ProAssurance is expected to generate 2.89 times more return on investment than Chubb. However, ProAssurance is 2.89 times more volatile than Chubb. It trades about 0.03 of its potential returns per unit of risk. Chubb is currently generating about 0.07 per unit of risk. If you would invest 1,821 in ProAssurance on January 18, 2025 and sell it today you would earn a total of 508.00 from holding ProAssurance or generate 27.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProAssurance vs. Chubb
Performance |
| Timeline |
| ProAssurance |
| Chubb |
ProAssurance and Chubb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProAssurance and Chubb
The main advantage of trading using opposite ProAssurance and Chubb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProAssurance position performs unexpectedly, Chubb 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 Chubb will offset losses from the drop in Chubb's long position.| ProAssurance vs. Argo Group International | ProAssurance vs. Horace Mann Educators | ProAssurance vs. Kemper | ProAssurance vs. Selective Insurance Group |
| Chubb vs. Merck Company | Chubb vs. Franklin FTSE South | Chubb vs. Procter Gamble | Chubb vs. Western Asset High |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |