Correlation Between ProAssurance and Eco Depot

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

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

Diversification Opportunities for ProAssurance and Eco Depot

0.0

Correlation Coefficient

ProAssurance  Eco Depot

Pay attention - limited upside

The 3 months correlation between ProAssurance and Eco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProAssurance and Eco Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Depot and ProAssurance 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 ProAssurance are associated (or correlated) with Eco Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Depot has no effect on the direction of ProAssurance i.e., ProAssurance and Eco Depot go up and down completely randomly.

Pair Corralation between ProAssurance and Eco Depot

If you would invest  1,501  in ProAssurance on October 24, 2024 and sell it today you would earn a total of  27.00  from holding ProAssurance or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProAssurance  vs.  Eco Depot

ProAssurance

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProAssurance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ProAssurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eco Depot

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Eco Depot has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Eco Depot is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ProAssurance and Eco Depot

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

The idea behind ProAssurance and Eco Depot 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.