Correlation Between Viemed Healthcare and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and Selective Insurance 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 Viemed Healthcare and Selective Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and Selective Insurance Group, you can compare the effects of market volatilities on Viemed Healthcare and Selective Insurance 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 Viemed Healthcare with a short position of Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and Selective Insurance.
Diversification Opportunities for Viemed Healthcare and Selective Insurance
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Viemed and Selective is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with Selective Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selective Insurance has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Selective Insurance go up and down completely randomly.
Pair Corralation between Viemed Healthcare and Selective Insurance
Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the Selective Insurance. In addition to that, Viemed Healthcare is 1.34 times more volatile than Selective Insurance Group. It trades about -0.04 of its total potential returns per unit of risk. Selective Insurance Group is currently generating about 0.05 per unit of volatility. If you would invest 8,970 in Selective Insurance Group on October 29, 2024 and sell it today you would earn a total of 356.00 from holding Selective Insurance Group or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. Selective Insurance Group
Performance |
| Timeline |
| Viemed Healthcare |
| Selective Insurance |
Viemed Healthcare and Selective Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and Selective Insurance
The main advantage of trading using opposite Viemed Healthcare and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare position performs unexpectedly, Selective Insurance 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 Selective Insurance will offset losses from the drop in Selective Insurance's long position.| Viemed Healthcare vs. Integer Holdings Corp | Viemed Healthcare vs. Glaukos Corp | Viemed Healthcare vs. CONMED | Viemed Healthcare vs. Pulmonx Corp |
| Selective Insurance vs. Kemper | Selective Insurance vs. Donegal Group B | Selective Insurance vs. Argo Group International | Selective Insurance 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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