Correlation Between FG Financial and Donegal Group
Can any of the company-specific risk be diversified away by investing in both FG Financial and Donegal Group 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 FG Financial and Donegal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Financial Group and Donegal Group B, you can compare the effects of market volatilities on FG Financial and Donegal Group 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 FG Financial with a short position of Donegal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Financial and Donegal Group.
Diversification Opportunities for FG Financial and Donegal Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PIH and Donegal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FG Financial Group and Donegal Group B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Group B and FG Financial 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 FG Financial Group are associated (or correlated) with Donegal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Group B has no effect on the direction of FG Financial i.e., FG Financial and Donegal Group go up and down completely randomly.
Pair Corralation between FG Financial and Donegal Group
If you would invest (100.00) in FG Financial Group on January 21, 2024 and sell it today you would earn a total of 100.00 from holding FG Financial Group or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
FG Financial Group vs. Donegal Group B
Performance |
Timeline |
FG Financial Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Donegal Group B |
FG Financial and Donegal Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FG Financial and Donegal Group
The main advantage of trading using opposite FG Financial and Donegal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Financial position performs unexpectedly, Donegal Group 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 Donegal Group will offset losses from the drop in Donegal Group's long position.FG Financial vs. Deluxe | FG Financial vs. Arrow Electronics | FG Financial vs. Townsquare Media | FG Financial vs. MYT Netherlands Parent |
Donegal Group vs. Horace Mann Educators | Donegal Group vs. United Fire Group | Donegal Group vs. Donegal Group A | Donegal Group vs. Global Indemnity PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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