Correlation Between Selective Insurance and MOTOROLA SOLTN
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and MOTOROLA SOLTN 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 MOTOROLA SOLTN 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 MOTOROLA SOLTN , you can compare the effects of market volatilities on Selective Insurance and MOTOROLA SOLTN 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 MOTOROLA SOLTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and MOTOROLA SOLTN.
Diversification Opportunities for Selective Insurance and MOTOROLA SOLTN
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Selective and MOTOROLA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and MOTOROLA SOLTN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOTOROLA SOLTN 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 MOTOROLA SOLTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOTOROLA SOLTN has no effect on the direction of Selective Insurance i.e., Selective Insurance and MOTOROLA SOLTN go up and down completely randomly.
Pair Corralation between Selective Insurance and MOTOROLA SOLTN
Assuming the 90 days horizon Selective Insurance is expected to generate 15.33 times less return on investment than MOTOROLA SOLTN. In addition to that, Selective Insurance is 1.58 times more volatile than MOTOROLA SOLTN . It trades about 0.01 of its total potential returns per unit of risk. MOTOROLA SOLTN is currently generating about 0.17 per unit of volatility. If you would invest 29,544 in MOTOROLA SOLTN on September 2, 2024 and sell it today you would earn a total of 17,546 from holding MOTOROLA SOLTN or generate 59.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. MOTOROLA SOLTN
Performance |
| Timeline |
| Selective Insurance |
| MOTOROLA SOLTN |
Selective Insurance and MOTOROLA SOLTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and MOTOROLA SOLTN
The main advantage of trading using opposite Selective Insurance and MOTOROLA SOLTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, MOTOROLA SOLTN 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 MOTOROLA SOLTN will offset losses from the drop in MOTOROLA SOLTN's long position.| Selective Insurance vs. Hemisphere Energy Corp | Selective Insurance vs. TOREX SEMICONDUCTOR LTD | Selective Insurance vs. SAFETY MEDICAL PROD | Selective Insurance vs. CompuGroup Medical SE |
| MOTOROLA SOLTN vs. Selective Insurance Group | MOTOROLA SOLTN vs. Burlington Stores | MOTOROLA SOLTN vs. SBI Insurance Group | MOTOROLA SOLTN vs. INSURANCE AUST GRP |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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