Correlation Between Baldwin Lyons and State Auto
Can any of the company-specific risk be diversified away by investing in both Baldwin Lyons and State Auto 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 Baldwin Lyons and State Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baldwin Lyons and State Auto Financial, you can compare the effects of market volatilities on Baldwin Lyons and State Auto 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 Baldwin Lyons with a short position of State Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baldwin Lyons and State Auto.
Diversification Opportunities for Baldwin Lyons and State Auto
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baldwin and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baldwin Lyons and State Auto Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Auto Financial and Baldwin Lyons 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 Baldwin Lyons are associated (or correlated) with State Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Auto Financial has no effect on the direction of Baldwin Lyons i.e., Baldwin Lyons and State Auto go up and down completely randomly.
Pair Corralation between Baldwin Lyons and State Auto
If you would invest (100.00) in State Auto Financial on January 24, 2024 and sell it today you would earn a total of 100.00 from holding State Auto Financial or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baldwin Lyons vs. State Auto Financial
Performance |
| Timeline |
| Baldwin Lyons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| State Auto Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Baldwin Lyons and State Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baldwin Lyons and State Auto
The main advantage of trading using opposite Baldwin Lyons and State Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baldwin Lyons position performs unexpectedly, State Auto 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 State Auto will offset losses from the drop in State Auto's long position.| Baldwin Lyons vs. Timken Company | Baldwin Lyons vs. Southwest Gas Holdings | Baldwin Lyons vs. WEC Energy Group | Baldwin Lyons vs. Kenon Holdings |
| State Auto vs. Global Ship Lease | State Auto vs. Eterna Therapeutics | State Auto vs. Catalyst Pharmaceuticals | State Auto vs. Lendlease Global Commercial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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