Correlation Between Selective Insurance and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare, you can compare the effects of market volatilities on Selective Insurance and Viemed Healthcare 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 Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and Viemed Healthcare.
Diversification Opportunities for Selective Insurance and Viemed Healthcare
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Selective and Viemed is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Selective Insurance i.e., Selective Insurance and Viemed Healthcare go up and down completely randomly.
Pair Corralation between Selective Insurance and Viemed Healthcare
Given the investment horizon of 90 days Selective Insurance Group is expected to generate 0.66 times more return on investment than Viemed Healthcare. However, Selective Insurance Group is 1.53 times less risky than Viemed Healthcare. It trades about -0.33 of its potential returns per unit of risk. Viemed Healthcare is currently generating about -0.27 per unit of risk. If you would invest 9,673 in Selective Insurance Group on October 14, 2024 and sell it today you would lose (703.00) from holding Selective Insurance Group or give up 7.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. Viemed Healthcare
Performance |
| Timeline |
| Selective Insurance |
| Viemed Healthcare |
Selective Insurance and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and Viemed Healthcare
The main advantage of trading using opposite Selective Insurance and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, Viemed Healthcare 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 Viemed Healthcare will offset losses from the drop in Viemed Healthcare'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 |
| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. IRIDEX | Viemed Healthcare vs. SurModics |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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