Correlation Between Till Capital and ProAssurance

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

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

Diversification Opportunities for Till Capital and ProAssurance

0.0

Correlation Coefficient

Till Capital  ProAssurance

Pay attention - limited upside

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

Pair Corralation between Till Capital and ProAssurance

If you would invest  1,554  in ProAssurance on December 30, 2024 and sell it today you would earn a total of  780.00  from holding ProAssurance or generate 50.19% return on investment over 90 days.

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

Till Capital  vs.  ProAssurance

Till Capital

Risk-Adjusted Performance

Very Weak

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

ProAssurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProAssurance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ProAssurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Till Capital and ProAssurance

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

The idea behind Till Capital and ProAssurance 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.