Correlation Between Chubb and Fednat Holding
Can any of the company-specific risk be diversified away by investing in both Chubb and Fednat Holding 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 Chubb and Fednat Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chubb and Fednat Holding Co, you can compare the effects of market volatilities on Chubb and Fednat Holding 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 Chubb with a short position of Fednat Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chubb and Fednat Holding.
Diversification Opportunities for Chubb and Fednat Holding
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chubb and Fednat is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chubb and Fednat Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fednat Holding and Chubb 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 Chubb are associated (or correlated) with Fednat Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fednat Holding has no effect on the direction of Chubb i.e., Chubb and Fednat Holding go up and down completely randomly.
Pair Corralation between Chubb and Fednat Holding
If you would invest 25,403 in Chubb on December 29, 2023 and sell it today you would earn a total of 447.00 from holding Chubb or generate 1.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Chubb vs. Fednat Holding Co
Performance |
Timeline |
Chubb |
Fednat Holding |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Chubb and Fednat Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chubb and Fednat Holding
The main advantage of trading using opposite Chubb and Fednat Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chubb position performs unexpectedly, Fednat Holding 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 Fednat Holding will offset losses from the drop in Fednat Holding's long position.Chubb vs. Loews Corp | Chubb vs. American Financial Group | Chubb vs. Hartford Financial Services | Chubb vs. Horace Mann Educators |
Fednat Holding vs. Cirrus Logic | Fednat Holding vs. World Houseware Limited | Fednat Holding vs. United Microelectronics | Fednat Holding vs. Steven Madden |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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