Correlation Between Donegal Group and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both Donegal Group and Selective Insurance 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 Donegal Group and Selective Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Donegal Group B and Selective Insurance Group, you can compare the effects of market volatilities on Donegal Group and Selective Insurance 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 Donegal Group with a short position of Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Group and Selective Insurance.
Diversification Opportunities for Donegal Group and Selective Insurance
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Donegal and Selective is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Group B and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and Donegal Group 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 Donegal Group B are associated (or correlated) with Selective Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selective Insurance has no effect on the direction of Donegal Group i.e., Donegal Group and Selective Insurance go up and down completely randomly.
Pair Corralation between Donegal Group and Selective Insurance
Assuming the 90 days horizon Donegal Group B is expected to under-perform the Selective Insurance. In addition to that, Donegal Group is 5.78 times more volatile than Selective Insurance Group. It trades about -0.02 of its total potential returns per unit of risk. Selective Insurance Group is currently generating about 0.2 per unit of volatility. If you would invest 1,677 in Selective Insurance Group on June 8, 2025 and sell it today you would earn a total of 121.00 from holding Selective Insurance Group or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Donegal Group B vs. Selective Insurance Group
Performance |
| Timeline |
| Donegal Group B |
| Selective Insurance |
Donegal Group and Selective Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Donegal Group and Selective Insurance
The main advantage of trading using opposite Donegal Group and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donegal Group position performs unexpectedly, Selective Insurance 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 Selective Insurance will offset losses from the drop in Selective Insurance's long position.| Donegal Group vs. Horace Mann Educators | Donegal Group vs. United Fire Group | Donegal Group vs. Donegal Group A | Donegal Group vs. Global Indemnity PLC |
| Selective Insurance vs. Donegal Group B | Selective Insurance vs. The Allstate | Selective Insurance vs. Aspen Insurance Holdings | Selective Insurance vs. The Allstate |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |