Correlation Between RLI Corp and Argo Group
Can any of the company-specific risk be diversified away by investing in both RLI Corp 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 RLI Corp and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLI Corp and Argo Group International, you can compare the effects of market volatilities on RLI Corp 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 RLI Corp with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLI Corp and Argo Group.
Diversification Opportunities for RLI Corp and Argo Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RLI and Argo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding RLI Corp 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 RLI Corp 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 RLI Corp 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 RLI Corp i.e., RLI Corp and Argo Group go up and down completely randomly.
Pair Corralation between RLI Corp and Argo Group
Considering the 90-day investment horizon RLI Corp is expected to under-perform the Argo Group. In addition to that, RLI Corp is 7.01 times more volatile than Argo Group International. It trades about -0.24 of its total potential returns per unit of risk. Argo Group International is currently generating about 0.18 per unit of volatility. If you would invest 2,492 in Argo Group International on October 20, 2024 and sell it today you would earn a total of 16.00 from holding Argo Group International or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLI Corp vs. Argo Group International
Performance |
| Timeline |
| RLI Corp |
| Argo Group International |
RLI Corp and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLI Corp and Argo Group
The main advantage of trading using opposite RLI Corp and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLI Corp 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.| RLI Corp vs. Horace Mann Educators | RLI Corp vs. Kemper | RLI Corp vs. Global Indemnity PLC | RLI Corp vs. Argo Group International |
| Argo Group vs. Zoom Video Communications | Argo Group vs. Zijin Mining Group | Argo Group vs. RadNet Inc | Argo Group vs. Universal Music Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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