Correlation Between Trupanion and ProAssurance
Can any of the company-specific risk be diversified away by investing in both Trupanion and ProAssurance 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 Trupanion and ProAssurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trupanion and ProAssurance, you can compare the effects of market volatilities on Trupanion and ProAssurance 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 Trupanion with a short position of ProAssurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trupanion and ProAssurance.
Diversification Opportunities for Trupanion and ProAssurance
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trupanion and ProAssurance is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion and ProAssurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProAssurance and Trupanion 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 Trupanion are associated (or correlated) with ProAssurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProAssurance has no effect on the direction of Trupanion i.e., Trupanion and ProAssurance go up and down completely randomly.
Pair Corralation between Trupanion and ProAssurance
Given the investment horizon of 90 days Trupanion is expected to generate 5.1 times less return on investment than ProAssurance. In addition to that, Trupanion is 4.72 times more volatile than ProAssurance. It trades about 0.0 of its total potential returns per unit of risk. ProAssurance is currently generating about 0.09 per unit of volatility. If you would invest 2,319 in ProAssurance on June 1, 2025 and sell it today you would earn a total of 59.00 from holding ProAssurance or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trupanion vs. ProAssurance
Performance |
| Timeline |
| Trupanion |
| ProAssurance |
Trupanion and ProAssurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trupanion and ProAssurance
The main advantage of trading using opposite Trupanion and ProAssurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trupanion position performs unexpectedly, ProAssurance 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 ProAssurance will offset losses from the drop in ProAssurance's long position.| Trupanion vs. AXIS Capital Holdings | Trupanion vs. Blackline | Trupanion vs. Five9 Inc | Trupanion vs. Fidelity National Financial |
| ProAssurance vs. Argo Group International | ProAssurance vs. Horace Mann Educators | ProAssurance vs. Kemper | ProAssurance vs. Selective Insurance Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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