Correlation Between Nascent Wine and Selective Insurance

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

Diversification Opportunities for Nascent Wine and Selective Insurance

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Nascent and Selective is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nascent Wine and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and Nascent Wine 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 Nascent Wine 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 Nascent Wine i.e., Nascent Wine and Selective Insurance go up and down completely randomly.

Pair Corralation between Nascent Wine and Selective Insurance

If you would invest  0.01  in Nascent Wine on August 27, 2025 and sell it today you would lose  0.00  from holding Nascent Wine or give up 0.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy98.44%
ValuesDaily Returns

Nascent Wine  vs.  Selective Insurance Group

 Performance 
       Timeline  
Nascent Wine 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Nascent Wine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nascent Wine is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Selective Insurance 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Selective Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Selective Insurance is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Nascent Wine and Selective Insurance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nascent Wine and Selective Insurance

The main advantage of trading using opposite Nascent Wine and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nascent Wine 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.
The idea behind Nascent Wine and Selective Insurance Group 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.
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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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