Correlation Between Kemper and W R

Can any of the company-specific risk be diversified away by investing in both Kemper and W R 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 Kemper and W R into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kemper and W R Berkley, you can compare the effects of market volatilities on Kemper and W R 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 Kemper with a short position of W R. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemper and W R.

Diversification Opportunities for Kemper and W R

-0.48

Correlation Coefficient

Kemper  W R

Very good diversification

The 3 months correlation between Kemper and WRB-PE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kemper and W R Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W R Berkley and Kemper 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 Kemper are associated (or correlated) with W R. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W R Berkley has no effect on the direction of Kemper i.e., Kemper and W R go up and down completely randomly.

Pair Corralation between Kemper and W R

Given the investment horizon of 90 days Kemper is expected to generate 3.03 times more return on investment than W R. However, Kemper is 3.03 times more volatile than W R Berkley. It trades about 0.07 of its potential returns per unit of risk. W R Berkley is currently generating about 0.09 per unit of risk. If you would invest  5,837  in Kemper on September 19, 2024 and sell it today you would earn a total of  777.00  from holding Kemper or generate 13.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kemper  vs.  W R Berkley

Kemper

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kemper are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Kemper may actually be approaching a critical reversion point that can send shares even higher in January 2025.

W R Berkley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days W R Berkley has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, W R is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kemper and W R

The main advantage of trading using opposite Kemper and W R positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemper position performs unexpectedly, W R 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 W R will offset losses from the drop in W R's long position.

The idea behind Kemper and W R Berkley pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..