Correlation Between Skyward Specialty and Horace Mann
Can any of the company-specific risk be diversified away by investing in both Skyward Specialty 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 Skyward Specialty and Horace Mann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skyward Specialty Insurance and Horace Mann Educators, you can compare the effects of market volatilities on Skyward Specialty 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 Skyward Specialty with a short position of Horace Mann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skyward Specialty and Horace Mann.
Diversification Opportunities for Skyward Specialty and Horace Mann
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Skyward and Horace is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Skyward Specialty Insurance 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 Skyward Specialty 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 Skyward Specialty Insurance 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 Skyward Specialty i.e., Skyward Specialty and Horace Mann go up and down completely randomly.
Pair Corralation between Skyward Specialty and Horace Mann
Given the investment horizon of 90 days Skyward Specialty Insurance is expected to under-perform the Horace Mann. In addition to that, Skyward Specialty is 1.91 times more volatile than Horace Mann Educators. It trades about -0.2 of its total potential returns per unit of risk. Horace Mann Educators is currently generating about -0.12 per unit of volatility. If you would invest 3,943 in Horace Mann Educators on October 20, 2024 and sell it today you would lose (126.00) from holding Horace Mann Educators or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skyward Specialty Insurance vs. Horace Mann Educators
Performance |
| Timeline |
| Skyward Specialty |
| Horace Mann Educators |
Skyward Specialty and Horace Mann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skyward Specialty and Horace Mann
The main advantage of trading using opposite Skyward Specialty and Horace Mann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skyward Specialty 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.| Skyward Specialty vs. Horace Mann Educators | Skyward Specialty vs. Kemper | Skyward Specialty vs. RLI Corp | Skyward Specialty vs. Global Indemnity PLC |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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