Correlation Between Till Capital and Selective Insurance

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

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

Diversification Opportunities for Till Capital and Selective Insurance

0.0

Correlation Coefficient

Till Capital  Selective Insurance

Pay attention - limited upside

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

Pair Corralation between Till Capital and Selective Insurance

If you would invest  1,721  in Selective Insurance Group on December 29, 2024 and sell it today you would earn a total of  128.00  from holding Selective Insurance Group or generate 7.44% return on investment over 90 days.

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

Till Capital  vs.  Selective Insurance Group

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Selective Insurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Selective Insurance Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Selective Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Till Capital and Selective Insurance

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

The idea behind Till Capital and Selective Insurance Group 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.