Correlation Between Selective Insurance and JPM INDIAN

Can any of the company-specific risk be diversified away by investing in both Selective Insurance and JPM INDIAN 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 JPM INDIAN 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 JPM INDIAN INVT, you can compare the effects of market volatilities on Selective Insurance and JPM INDIAN 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 JPM INDIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and JPM INDIAN.

Diversification Opportunities for Selective Insurance and JPM INDIAN

0.0

Correlation Coefficient

Selective Insurance  JPM INDIAN

Pay attention - limited upside

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

Pair Corralation between Selective Insurance and JPM INDIAN

If you would invest (100.00) in JPM INDIAN INVT on October 6, 2024 and sell it today you would earn a total of  100.00  from holding JPM INDIAN INVT or generate -100.0% return on investment over 90 days.

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

Selective Insurance Group  vs.  JPM INDIAN INVT

Selective Insurance

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Selective Insurance Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Selective Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

JPM INDIAN INVT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPM INDIAN INVT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, JPM INDIAN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Selective Insurance and JPM INDIAN

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

The idea behind Selective Insurance Group and JPM INDIAN INVT 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.