Correlation Between RLI Corp and Stewart Information
Can any of the company-specific risk be diversified away by investing in both RLI Corp and Stewart Information 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 RLI Corp and Stewart Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLI Corp and Stewart Information Services, you can compare the effects of market volatilities on RLI Corp and Stewart Information 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 RLI Corp with a short position of Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLI Corp and Stewart Information.
Diversification Opportunities for RLI Corp and Stewart Information
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RLI and Stewart is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding RLI Corp and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information and RLI 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 RLI Corp are associated (or correlated) with Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of RLI Corp i.e., RLI Corp and Stewart Information go up and down completely randomly.
Pair Corralation between RLI Corp and Stewart Information
Considering the 90-day investment horizon RLI Corp is expected to under-perform the Stewart Information. But the stock apears to be less risky and, when comparing its historical volatility, RLI Corp is 1.48 times less risky than Stewart Information. The stock trades about -0.05 of its potential returns per unit of risk. The Stewart Information Services is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,984 in Stewart Information Services on March 14, 2024 and sell it today you would earn a total of 23.00 from holding Stewart Information Services or generate 0.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
RLI Corp vs. Stewart Information Services
Performance |
Timeline |
RLI Corp |
Stewart Information |
RLI Corp and Stewart Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RLI Corp and Stewart Information
The main advantage of trading using opposite RLI Corp and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLI Corp position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information's long position.RLI Corp vs. Horace Mann Educators | RLI Corp vs. Kemper | RLI Corp vs. Argo Group International | RLI Corp vs. Donegal Group B |
Stewart Information vs. Horace Mann Educators | Stewart Information vs. Kemper | Stewart Information vs. RLI Corp | Stewart Information vs. Argo Group International |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Equity Valuation Check real value of public entities based on technical and fundamental data |