Correlation Between Selective Insurance and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Selective Insurance and Sachem Capital 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 Selective Insurance and Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selective Insurance Group and Sachem Capital Corp, you can compare the effects of market volatilities on Selective Insurance and Sachem Capital 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 Selective Insurance with a short position of Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selective Insurance and Sachem Capital.
Diversification Opportunities for Selective Insurance and Sachem Capital
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Selective and Sachem is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp and Selective Insurance 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 Selective Insurance Group are associated (or correlated) with Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Selective Insurance i.e., Selective Insurance and Sachem Capital go up and down completely randomly.
Pair Corralation between Selective Insurance and Sachem Capital
Given the investment horizon of 90 days Selective Insurance Group is expected to generate 0.5 times more return on investment than Sachem Capital. However, Selective Insurance Group is 2.01 times less risky than Sachem Capital. It trades about -0.02 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about -0.05 per unit of risk. If you would invest 8,060 in Selective Insurance Group on September 4, 2025 and sell it today you would lose (204.00) from holding Selective Insurance Group or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selective Insurance Group vs. Sachem Capital Corp
Performance |
| Timeline |
| Selective Insurance |
| Sachem Capital Corp |
Selective Insurance and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selective Insurance and Sachem Capital
The main advantage of trading using opposite Selective Insurance and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| Selective Insurance vs. Universal Music Group | Selective Insurance vs. NanoTech Entertainment | Selective Insurance vs. Infinite Technology Corp | Selective Insurance vs. Trio Tech International |
| Sachem Capital vs. Orthometrix | Sachem Capital vs. Bridgford Foods | Sachem Capital vs. Romana Food Brands | Sachem Capital vs. BG Foods |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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