Correlation Between Selective Insurance and Xp
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and Xp 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 Xp 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 Xp Inc, you can compare the effects of market volatilities on Selective Insurance and Xp 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 Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and Xp.
Diversification Opportunities for Selective Insurance and Xp
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Selective and Xp is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Selective Insurance i.e., Selective Insurance and Xp go up and down completely randomly.
Pair Corralation between Selective Insurance and Xp
Given the investment horizon of 90 days Selective Insurance Group is expected to under-perform the Xp. In addition to that, Selective Insurance is 1.75 times more volatile than Xp Inc. It trades about -0.24 of its total potential returns per unit of risk. Xp Inc is currently generating about 0.31 per unit of volatility. If you would invest 1,314 in Xp Inc on November 27, 2024 and sell it today you would earn a total of 151.00 from holding Xp Inc or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. Xp Inc
Performance |
| Timeline |
| Selective Insurance |
| Xp Inc |
Selective Insurance and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and Xp
The main advantage of trading using opposite Selective Insurance and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| Selective Insurance vs. Kemper | Selective Insurance vs. Argo Group International | Selective Insurance vs. Global Indemnity PLC | Selective Insurance vs. Horace Mann Educators |
| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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