Correlation Between Selectquote and Crawford
Can any of the company-specific risk be diversified away by investing in both Selectquote and Crawford 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 Selectquote and Crawford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selectquote and Crawford Company, you can compare the effects of market volatilities on Selectquote and Crawford 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 Selectquote with a short position of Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selectquote and Crawford.
Diversification Opportunities for Selectquote and Crawford
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Selectquote and Crawford is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Selectquote and Crawford Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford and Selectquote 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 Selectquote are associated (or correlated) with Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford has no effect on the direction of Selectquote i.e., Selectquote and Crawford go up and down completely randomly.
Pair Corralation between Selectquote and Crawford
Given the investment horizon of 90 days Selectquote is expected to generate 2.52 times more return on investment than Crawford. However, Selectquote is 2.52 times more volatile than Crawford Company. It trades about 0.08 of its potential returns per unit of risk. Crawford Company is currently generating about 0.06 per unit of risk. If you would invest 54.00 in Selectquote on August 28, 2024 and sell it today you would earn a total of 228.00 from holding Selectquote or generate 422.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selectquote vs. Crawford Company
Performance |
| Timeline |
| Selectquote |
| Crawford |
Selectquote and Crawford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selectquote and Crawford
The main advantage of trading using opposite Selectquote and Crawford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selectquote position performs unexpectedly, Crawford 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 Crawford will offset losses from the drop in Crawford's long position.| Selectquote vs. CorVel Corp | Selectquote vs. eHealth | Selectquote vs. Aquagold International | Selectquote vs. Morningstar Unconstrained Allocation |
| Crawford vs. CorVel Corp | Crawford vs. Erie Indemnity | Crawford vs. Willis Towers Watson | Crawford vs. Huize Holding |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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