Correlation Between Chubb and Alleghany
Can any of the company-specific risk be diversified away by investing in both Chubb and Alleghany 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 Alleghany into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chubb and Alleghany, you can compare the effects of market volatilities on Chubb and Alleghany 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 Alleghany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chubb and Alleghany.
Diversification Opportunities for Chubb and Alleghany
Very poor diversification
The 3 months correlation between Chubb and Alleghany is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Chubb and Alleghany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alleghany 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 Alleghany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alleghany has no effect on the direction of Chubb i.e., Chubb and Alleghany go up and down completely randomly.
Pair Corralation between Chubb and Alleghany
If you would invest 25,403 in Chubb on December 29, 2023 and sell it today you would earn a total of 510.00 from holding Chubb or generate 2.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 4.35% |
Values | Daily Returns |
Chubb vs. Alleghany
Performance |
Timeline |
Chubb |
Alleghany |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Chubb and Alleghany Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chubb and Alleghany
The main advantage of trading using opposite Chubb and Alleghany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chubb position performs unexpectedly, Alleghany 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 Alleghany will offset losses from the drop in Alleghany's long position.Chubb vs. Loews Corp | Chubb vs. American Financial Group | Chubb vs. Hartford Financial Services | Chubb vs. Horace Mann Educators |
Alleghany vs. Asure Software | Alleghany vs. Beyond Inc | Alleghany vs. Western Digital | Alleghany vs. Getty Copper |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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