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
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Selective and CSSC is 0.49. 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 4.25 times more return on investment than CSSC Offshore. However, Selective Insurance is 4.25 times more volatile than CSSC Offshore Marine. It trades about 0.0 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.22 per unit of risk. If you would invest 8,610 in Selective Insurance Group on December 28, 2024 and sell it today you would lose (310.00) from holding Selective Insurance Group or give up 3.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.39% |
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. The Progressive | Selective Insurance vs. The Allstate | Selective Insurance vs. PICC Property and | Selective Insurance vs. Cincinnati Financial |
CSSC Offshore vs. GOLD ROAD RES | CSSC Offshore vs. NAGOYA RAILROAD | CSSC Offshore vs. Liberty Broadband | CSSC Offshore vs. Coor Service Management |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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