Correlation Between Progressive Corp and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both Progressive Corp and AXIS Capital 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 AXIS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Corp and AXIS Capital Holdings, you can compare the effects of market volatilities on Progressive Corp and AXIS Capital 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 AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Corp and AXIS Capital.
Diversification Opportunities for Progressive Corp and AXIS Capital
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Progressive and AXIS is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings 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 AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of Progressive Corp i.e., Progressive Corp and AXIS Capital go up and down completely randomly.
Pair Corralation between Progressive Corp and AXIS Capital
Considering the 90-day investment horizon Progressive Corp is expected to under-perform the AXIS Capital. But the stock apears to be less risky and, when comparing its historical volatility, Progressive Corp is 1.58 times less risky than AXIS Capital. The stock trades about -0.03 of its potential returns per unit of risk. The AXIS Capital Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,539 in AXIS Capital Holdings on February 6, 2024 and sell it today you would earn a total of 86.00 from holding AXIS Capital Holdings or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progressive Corp vs. AXIS Capital Holdings
Performance |
| Timeline |
| Progressive Corp |
| AXIS Capital Holdings |
Progressive Corp and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive Corp and AXIS Capital
The main advantage of trading using opposite Progressive Corp and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Corp position performs unexpectedly, AXIS Capital 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| Progressive Corp vs. The Travelers Companies | Progressive Corp vs. Chubb | Progressive Corp vs. Cincinnati Financial | Progressive Corp vs. W R Berkley |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |