Correlation Between CNA Financial and EMC Insurance
Can any of the company-specific risk be diversified away by investing in both CNA Financial and EMC 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 CNA Financial and EMC Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNA Financial and EMC Insurance Group, you can compare the effects of market volatilities on CNA Financial and EMC 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 CNA Financial with a short position of EMC Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNA Financial and EMC Insurance.
Diversification Opportunities for CNA Financial and EMC Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNA and EMC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNA Financial and EMC Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMC Insurance Group and CNA Financial 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 CNA Financial are associated (or correlated) with EMC Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMC Insurance Group has no effect on the direction of CNA Financial i.e., CNA Financial and EMC Insurance go up and down completely randomly.
Pair Corralation between CNA Financial and EMC Insurance
If you would invest (100.00) in EMC Insurance Group on January 20, 2024 and sell it today you would earn a total of 100.00 from holding EMC Insurance Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CNA Financial vs. EMC Insurance Group
Performance |
| Timeline |
| CNA Financial |
| EMC Insurance Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CNA Financial and EMC Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNA Financial and EMC Insurance
The main advantage of trading using opposite CNA Financial and EMC Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNA Financial position performs unexpectedly, EMC 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 EMC Insurance will offset losses from the drop in EMC Insurance's long position.| CNA Financial vs. Selective Insurance Group | CNA Financial vs. Kemper | CNA Financial vs. Donegal Group B | CNA Financial vs. Argo Group International |
| EMC Insurance vs. Agiliti | EMC Insurance vs. Kaltura | EMC Insurance vs. Definitive Healthcare Corp | EMC Insurance vs. CDW Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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