Correlation Between Selective Insurance and Grupo Carso

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

Diversification Opportunities for Selective Insurance and Grupo Carso

-0.22

Correlation Coefficient

Selective Insurance  Grupo Carso

Very good diversification

The 3 months correlation between Selective and Grupo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Selective Insurance i.e., Selective Insurance and Grupo Carso go up and down completely randomly.

Pair Corralation between Selective Insurance and Grupo Carso

Assuming the 90 days horizon Selective Insurance Group is expected to under-perform the Grupo Carso. In addition to that, Selective Insurance is 1.84 times more volatile than Grupo Carso SAB. It trades about -0.02 of its total potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.01 per unit of volatility. If you would invest  515.00  in Grupo Carso SAB on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Grupo Carso SAB or generate 0.0% return on investment over 90 days.

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

Selective Insurance Group  vs.  Grupo Carso SAB

Selective Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Selective Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Grupo Carso SAB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Selective Insurance and Grupo Carso

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

The idea behind Selective Insurance Group and Grupo Carso SAB 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..