Correlation Between Progressive Corp and Fednat Holding
Can any of the company-specific risk be diversified away by investing in both Progressive Corp and Fednat Holding 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 Fednat Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Corp and Fednat Holding Co, you can compare the effects of market volatilities on Progressive Corp and Fednat Holding 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 Fednat Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Corp and Fednat Holding.
Diversification Opportunities for Progressive Corp and Fednat Holding
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Progressive and Fednat is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp and Fednat Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fednat Holding 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 Fednat Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fednat Holding has no effect on the direction of Progressive Corp i.e., Progressive Corp and Fednat Holding go up and down completely randomly.
Pair Corralation between Progressive Corp and Fednat Holding
Considering the 90-day investment horizon Progressive Corp is expected to generate 26.02 times less return on investment than Fednat Holding. But when comparing it to its historical volatility, Progressive Corp is 28.66 times less risky than Fednat Holding. It trades about 0.09 of its potential returns per unit of risk. Fednat Holding Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Fednat Holding Co on January 25, 2024 and sell it today you would lose (36.84) from holding Fednat Holding Co or give up 99.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 33.41% |
| Values | Daily Returns |
Progressive Corp vs. Fednat Holding Co
Performance |
| Timeline |
| Progressive Corp |
| Fednat Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Progressive Corp and Fednat Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive Corp and Fednat Holding
The main advantage of trading using opposite Progressive Corp and Fednat Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Corp position performs unexpectedly, Fednat Holding 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 Fednat Holding will offset losses from the drop in Fednat Holding's long position.| Progressive Corp vs. The Travelers Companies | Progressive Corp vs. Chubb | Progressive Corp vs. Cincinnati Financial | Progressive Corp vs. W R Berkley |
| Fednat Holding vs. Asure Software | Fednat Holding vs. Anheuser Busch Inbev | Fednat Holding vs. DHI Group | Fednat Holding vs. Bm Technologies |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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