Correlation Between Stewart Information and Chubb
Can any of the company-specific risk be diversified away by investing in both Stewart Information and Chubb 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 Stewart Information and Chubb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stewart Information Services and Chubb, you can compare the effects of market volatilities on Stewart Information and Chubb 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 Stewart Information with a short position of Chubb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and Chubb.
Diversification Opportunities for Stewart Information and Chubb
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stewart and Chubb is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and Chubb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb and Stewart Information 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 Stewart Information Services are associated (or correlated) with Chubb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chubb has no effect on the direction of Stewart Information i.e., Stewart Information and Chubb go up and down completely randomly.
Pair Corralation between Stewart Information and Chubb
Considering the 90-day investment horizon Stewart Information Services is expected to generate 1.69 times more return on investment than Chubb. However, Stewart Information is 1.69 times more volatile than Chubb. It trades about 0.24 of its potential returns per unit of risk. Chubb is currently generating about -0.02 per unit of risk. If you would invest 6,955 in Stewart Information Services on August 29, 2024 and sell it today you would earn a total of 557.00 from holding Stewart Information Services or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stewart Information Services vs. Chubb
Performance |
| Timeline |
| Stewart Information |
| Chubb |
Stewart Information and Chubb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Information and Chubb
The main advantage of trading using opposite Stewart Information and Chubb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Information position performs unexpectedly, Chubb 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 Chubb will offset losses from the drop in Chubb's long position.| Stewart Information vs. Selective Insurance Group | Stewart Information vs. Kemper | Stewart Information vs. Donegal Group B | Stewart Information vs. Argo Group International |
| Chubb vs. Cincinnati Financial | Chubb vs. Aflac Incorporated | Chubb vs. Dover | Chubb vs. Franklin Resources |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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