Correlation Between Selective Insurance and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and CSSC Offshore 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 CSSC Offshore 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 CSSC Offshore Marine, you can compare the effects of market volatilities on Selective Insurance and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and CSSC Offshore.
Diversification Opportunities for Selective Insurance and CSSC Offshore
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Selective and CSSC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Selective Insurance i.e., Selective Insurance and CSSC Offshore go up and down completely randomly.
Pair Corralation between Selective Insurance and CSSC Offshore
Assuming the 90 days horizon Selective Insurance Group is expected to generate 1.12 times more return on investment than CSSC Offshore. However, Selective Insurance is 1.12 times more volatile than CSSC Offshore Marine. It trades about 0.01 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.05 per unit of risk. If you would invest 7,933 in Selective Insurance Group on December 10, 2024 and sell it today you would earn a total of 17.00 from holding Selective Insurance Group or generate 0.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.19% |
Values | Daily Returns |
Selective Insurance Group vs. CSSC Offshore Marine
Performance |
Timeline |
Selective Insurance |
CSSC Offshore Marine |
Selective Insurance and CSSC Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Selective Insurance and CSSC Offshore
The main advantage of trading using opposite Selective Insurance and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.Selective Insurance vs. YATRA ONLINE DL 0001 | Selective Insurance vs. Check Point Software | Selective Insurance vs. Axway Software SA | Selective Insurance vs. FORMPIPE SOFTWARE AB |
CSSC Offshore vs. Geely Automobile Holdings | CSSC Offshore vs. PSI Software AG | CSSC Offshore vs. Sqs Software Quality | CSSC Offshore vs. INTER CARS SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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