Correlation Between Selective Insurance and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on Selective Insurance and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and INSURANCE AUST.
Diversification Opportunities for Selective Insurance and INSURANCE AUST
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Selective and INSURANCE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Selective Insurance i.e., Selective Insurance and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Selective Insurance and INSURANCE AUST
Assuming the 90 days horizon Selective Insurance is expected to generate 2.01 times less return on investment than INSURANCE AUST. In addition to that, Selective Insurance is 1.3 times more volatile than INSURANCE AUST GRP. It trades about 0.08 of its total potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.2 per unit of volatility. If you would invest 456.00 in INSURANCE AUST GRP on August 24, 2024 and sell it today you would earn a total of 36.00 from holding INSURANCE AUST GRP or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Selective Insurance Group vs. INSURANCE AUST GRP
Performance |
| Timeline |
| Selective Insurance |
| INSURANCE AUST GRP |
Selective Insurance and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and INSURANCE AUST
The main advantage of trading using opposite Selective Insurance and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Selective Insurance vs. QBE Insurance Group | Selective Insurance vs. Insurance Australia Group | Selective Insurance vs. Superior Plus Corp | Selective Insurance vs. NMI Holdings |
| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |