Correlation Between FG Financial and Chubb

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Can any of the company-specific risk be diversified away by investing in both FG Financial and Chubb 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 FG Financial and Chubb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Financial Group and Chubb, you can compare the effects of market volatilities on FG Financial and Chubb 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 FG Financial with a short position of Chubb. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Financial and Chubb.

Diversification Opportunities for FG Financial and Chubb

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between PIH and Chubb is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FG Financial Group and Chubb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb and FG 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 FG Financial Group are associated (or correlated) with Chubb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chubb has no effect on the direction of FG Financial i.e., FG Financial and Chubb go up and down completely randomly.

Pair Corralation between FG Financial and Chubb

If you would invest  20,923  in Chubb on December 29, 2023 and sell it today you would earn a total of  4,927  from holding Chubb or generate 23.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

FG Financial Group  vs.  Chubb

 Performance 
       Timeline  
FG Financial Group 

Risk-Adjusted Performance

0 of 100

 
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High
Very Weak
Over the last 90 days FG Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, FG Financial is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.
Chubb 

Risk-Adjusted Performance

23 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Chubb are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Chubb sustained solid returns over the last few months and may actually be approaching a breakup point.

FG Financial and Chubb Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FG Financial and Chubb

The main advantage of trading using opposite FG Financial and Chubb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Financial position performs unexpectedly, Chubb 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 Chubb will offset losses from the drop in Chubb's long position.
The idea behind FG Financial Group and Chubb pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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