Correlation Between RLI Corp and Horace Mann
Can any of the company-specific risk be diversified away by investing in both RLI Corp and Horace Mann 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 Horace Mann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLI Corp and Horace Mann Educators, you can compare the effects of market volatilities on RLI Corp and Horace Mann 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 Horace Mann. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLI Corp and Horace Mann.
Diversification Opportunities for RLI Corp and Horace Mann
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RLI and Horace is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding RLI Corp and Horace Mann Educators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horace Mann Educators 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 Horace Mann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horace Mann Educators has no effect on the direction of RLI Corp i.e., RLI Corp and Horace Mann go up and down completely randomly.
Pair Corralation between RLI Corp and Horace Mann
Considering the 90-day investment horizon RLI Corp is expected to under-perform the Horace Mann. In addition to that, RLI Corp is 1.51 times more volatile than Horace Mann Educators. It trades about -0.23 of its total potential returns per unit of risk. Horace Mann Educators is currently generating about 0.03 per unit of volatility. If you would invest 3,869 in Horace Mann Educators on November 2, 2024 and sell it today you would earn a total of 26.00 from holding Horace Mann Educators or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLI Corp vs. Horace Mann Educators
Performance |
| Timeline |
| RLI Corp |
| Horace Mann Educators |
RLI Corp and Horace Mann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLI Corp and Horace Mann
The main advantage of trading using opposite RLI Corp and Horace Mann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLI Corp position performs unexpectedly, Horace Mann 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 Horace Mann will offset losses from the drop in Horace Mann'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 |
| Horace Mann vs. Kemper | Horace Mann vs. RLI Corp | Horace Mann vs. Global Indemnity PLC | Horace Mann vs. Argo Group International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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