Correlation Between Selective Insurance and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and Geely Automobile 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 Geely Automobile 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 Geely Automobile Holdings, you can compare the effects of market volatilities on Selective Insurance and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and Geely Automobile.
Diversification Opportunities for Selective Insurance and Geely Automobile
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Selective and Geely is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Selective Insurance i.e., Selective Insurance and Geely Automobile go up and down completely randomly.
Pair Corralation between Selective Insurance and Geely Automobile
Assuming the 90 days horizon Selective Insurance Group is expected to generate 0.64 times more return on investment than Geely Automobile. However, Selective Insurance Group is 1.57 times less risky than Geely Automobile. It trades about 0.02 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.01 per unit of risk. If you would invest 8,665 in Selective Insurance Group on August 25, 2024 and sell it today you would earn a total of 35.00 from holding Selective Insurance Group or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. Geely Automobile Holdings
Performance |
| Timeline |
| Selective Insurance |
| Geely Automobile Holdings |
Selective Insurance and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and Geely Automobile
The main advantage of trading using opposite Selective Insurance and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Selective Insurance vs. Pembina Pipeline Corp | Selective Insurance vs. Merit Medical Systems | Selective Insurance vs. MeVis Medical Solutions | Selective Insurance vs. Clearside Biomedical |
| Geely Automobile vs. Tesla Inc | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. NMI 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |