Correlation Between Stewart Information and Donegal Group
Can any of the company-specific risk be diversified away by investing in both Stewart Information and Donegal Group 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 Donegal Group 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 Donegal Group B, you can compare the effects of market volatilities on Stewart Information and Donegal Group 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 Donegal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and Donegal Group.
Diversification Opportunities for Stewart Information and Donegal Group
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stewart and Donegal is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and Donegal Group B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Group B 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 Donegal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Group B has no effect on the direction of Stewart Information i.e., Stewart Information and Donegal Group go up and down completely randomly.
Pair Corralation between Stewart Information and Donegal Group
Considering the 90-day investment horizon Stewart Information is expected to generate 1.82 times less return on investment than Donegal Group. But when comparing it to its historical volatility, Stewart Information Services is 1.77 times less risky than Donegal Group. It trades about 0.21 of its potential returns per unit of risk. Donegal Group B is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,257 in Donegal Group B on August 24, 2024 and sell it today you would earn a total of 178.00 from holding Donegal Group B or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.61% |
| Values | Daily Returns |
Stewart Information Services vs. Donegal Group B
Performance |
| Timeline |
| Stewart Information |
| Donegal Group B |
Stewart Information and Donegal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Information and Donegal Group
The main advantage of trading using opposite Stewart Information and Donegal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Information position performs unexpectedly, Donegal Group 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 Donegal Group will offset losses from the drop in Donegal Group'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 |
| Donegal Group vs. Horace Mann Educators | Donegal Group vs. United Fire Group | Donegal Group vs. Donegal Group A | Donegal Group vs. Global Indemnity PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |