Correlation Between Kinsale Capital and Progressive Corp

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

By analyzing existing cross correlation between Kinsale Capital Group and Progressive Corp, you can compare the effects of market volatilities on Kinsale Capital and Progressive Corp 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 Kinsale Capital with a short position of Progressive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Progressive Corp.

Diversification Opportunities for Kinsale Capital and Progressive Corp

0.65

Correlation Coefficient

Kinsale Capital  Progressive Corp

Poor diversification

The 3 months correlation between Kinsale and Progressive is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Progressive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Corp and Kinsale Capital 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 Kinsale Capital Group are associated (or correlated) with Progressive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Corp has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Progressive Corp go up and down completely randomly.

Pair Corralation between Kinsale Capital and Progressive Corp

Given the investment horizon of 90 days Kinsale Capital is expected to generate 1.02 times less return on investment than Progressive Corp. In addition to that, Kinsale Capital is 1.57 times more volatile than Progressive Corp. It trades about 0.05 of its total potential returns per unit of risk. Progressive Corp is currently generating about 0.08 per unit of volatility. If you would invest  25,210  in Progressive Corp on August 30, 2024 and sell it today you would earn a total of  1,476  from holding Progressive Corp or generate 5.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Kinsale Capital Group  vs.  Progressive Corp

Kinsale Capital Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinsale Capital Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Kinsale Capital is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Progressive Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Progressive Corp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kinsale Capital and Progressive Corp

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

The idea behind Kinsale Capital Group and Progressive Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.