Correlation Between Selective Insurance and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners,, you can compare the effects of market volatilities on Selective Insurance and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and Virtus Investment.
Diversification Opportunities for Selective Insurance and Virtus Investment
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Selective and Virtus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Selective Insurance i.e., Selective Insurance and Virtus Investment go up and down completely randomly.
Pair Corralation between Selective Insurance and Virtus Investment
Given the investment horizon of 90 days Selective Insurance Group is expected to generate 0.81 times more return on investment than Virtus Investment. However, Selective Insurance Group is 1.24 times less risky than Virtus Investment. It trades about -0.19 of its potential returns per unit of risk. Virtus Investment Partners, is currently generating about -0.29 per unit of risk. If you would invest 10,200 in Selective Insurance Group on October 28, 2024 and sell it today you would lose (874.00) from holding Selective Insurance Group or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. Virtus Investment Partners,
Performance |
| Timeline |
| Selective Insurance |
| Virtus Investment |
Selective Insurance and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and Virtus Investment
The main advantage of trading using opposite Selective Insurance and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment'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 |
| Virtus Investment vs. Invesco Advantage MIT | Virtus Investment vs. Invesco Municipal Trust | Virtus Investment vs. Invesco California Value | Virtus Investment vs. Tri Continental Closed |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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