Correlation Between ProAssurance and Progressive Corp
Can any of the company-specific risk be diversified away by investing in both ProAssurance and Progressive Corp 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 Progressive Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProAssurance and Progressive Corp, you can compare the effects of market volatilities on ProAssurance and Progressive Corp 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 Progressive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProAssurance and Progressive Corp.
Diversification Opportunities for ProAssurance and Progressive Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProAssurance and Progressive is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ProAssurance and Progressive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Corp 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 Progressive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Corp has no effect on the direction of ProAssurance i.e., ProAssurance and Progressive Corp go up and down completely randomly.
Pair Corralation between ProAssurance and Progressive Corp
Considering the 90-day investment horizon ProAssurance is expected to under-perform the Progressive Corp. In addition to that, ProAssurance is 1.85 times more volatile than Progressive Corp. It trades about -0.1 of its total potential returns per unit of risk. Progressive Corp is currently generating about 0.18 per unit of volatility. If you would invest 23,595 in Progressive Corp on November 3, 2024 and sell it today you would earn a total of 1,049 from holding Progressive Corp or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProAssurance vs. Progressive Corp
Performance |
| Timeline |
| ProAssurance |
| Progressive Corp |
ProAssurance and Progressive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProAssurance and Progressive Corp
The main advantage of trading using opposite ProAssurance and Progressive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProAssurance position performs unexpectedly, Progressive Corp 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 Progressive Corp will offset losses from the drop in Progressive Corp's long position.| ProAssurance vs. Argo Group International | ProAssurance vs. Horace Mann Educators | ProAssurance vs. Kemper | ProAssurance vs. Selective Insurance Group |
| Progressive Corp vs. The Travelers Companies | Progressive Corp vs. Chubb | Progressive Corp vs. Cincinnati Financial | Progressive Corp vs. W R Berkley |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |