Correlation Between Progressive Corp and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Progressive Corp and Europacific Growth 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 Progressive Corp and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Corp and Europacific Growth Fund, you can compare the effects of market volatilities on Progressive Corp and Europacific Growth 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 Progressive Corp with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Corp and Europacific Growth.
Diversification Opportunities for Progressive Corp and Europacific Growth
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Progressive and Europacific is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and Progressive Corp 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 Progressive Corp are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Progressive Corp i.e., Progressive Corp and Europacific Growth go up and down completely randomly.
Pair Corralation between Progressive Corp and Europacific Growth
Considering the 90-day investment horizon Progressive Corp is expected to generate 1.56 times more return on investment than Europacific Growth. However, Progressive Corp is 1.56 times more volatile than Europacific Growth Fund. It trades about 0.38 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.07 per unit of risk. If you would invest 15,562 in Progressive Corp on January 20, 2024 and sell it today you would earn a total of 5,907 from holding Progressive Corp or generate 37.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progressive Corp vs. Europacific Growth Fund
Performance |
| Timeline |
| Progressive Corp |
| Europacific Growth |
Progressive Corp and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive Corp and Europacific Growth
The main advantage of trading using opposite Progressive Corp and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Corp position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| Progressive Corp vs. The Travelers Companies | Progressive Corp vs. Chubb | Progressive Corp vs. Cincinnati Financial | Progressive Corp vs. W R Berkley |
| Europacific Growth vs. Income Fund Of | Europacific Growth vs. New World Fund | Europacific Growth vs. American Mutual Fund | Europacific Growth vs. American Mutual Fund |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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