Correlation Between Selective Insurance and Chubb
Can any of the company-specific risk be diversified away by investing in both Selective Insurance 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 Selective Insurance and Chubb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selective Insurance Group and Chubb, you can compare the effects of market volatilities on Selective Insurance 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 Selective Insurance with a short position of Chubb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and Chubb.
Diversification Opportunities for Selective Insurance and Chubb
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Selective and Chubb is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Chubb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb and Selective Insurance 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 Selective Insurance Group 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 Selective Insurance i.e., Selective Insurance and Chubb go up and down completely randomly.
Pair Corralation between Selective Insurance and Chubb
Given the investment horizon of 90 days Selective Insurance Group is expected to generate 2.24 times more return on investment than Chubb. However, Selective Insurance is 2.24 times more volatile than Chubb. It trades about 0.2 of its potential returns per unit of risk. Chubb is currently generating about -0.09 per unit of risk. If you would invest 9,122 in Selective Insurance Group on August 27, 2024 and sell it today you would earn a total of 743.00 from holding Selective Insurance Group or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. Chubb
Performance |
| Timeline |
| Selective Insurance |
| Chubb |
Selective Insurance and Chubb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and Chubb
The main advantage of trading using opposite Selective Insurance and Chubb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance 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.| Selective Insurance vs. Kemper | Selective Insurance vs. Donegal Group B | Selective Insurance vs. Argo Group International | Selective Insurance vs. Global Indemnity PLC |
| Chubb vs. Cincinnati Financial | Chubb vs. Aflac Incorporated | Chubb vs. Dover | Chubb vs. Franklin Resources |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |