Correlation Between Arthur J and CorVel Corp

Can any of the company-specific risk be diversified away by investing in both Arthur J and CorVel Corp 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 Arthur J and CorVel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arthur J Gallagher and CorVel Corp, you can compare the effects of market volatilities on Arthur J and CorVel Corp 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 Arthur J with a short position of CorVel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arthur J and CorVel Corp.

Diversification Opportunities for Arthur J and CorVel Corp

0.86

Correlation Coefficient

Arthur J  CorVel Corp

Very poor diversification

The 3 months correlation between Arthur and CorVel is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Arthur J Gallagher and CorVel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CorVel Corp and Arthur J 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 Arthur J Gallagher are associated (or correlated) with CorVel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CorVel Corp has no effect on the direction of Arthur J i.e., Arthur J and CorVel Corp go up and down completely randomly.

Pair Corralation between Arthur J and CorVel Corp

Considering the 90-day investment horizon Arthur J Gallagher is expected to generate 0.95 times more return on investment than CorVel Corp. However, Arthur J Gallagher is 1.05 times less risky than CorVel Corp. It trades about -0.17 of its potential returns per unit of risk. CorVel Corp is currently generating about -0.24 per unit of risk. If you would invest  33,420  in Arthur J Gallagher on May 4, 2025 and sell it today you would lose (5,003) from holding Arthur J Gallagher or give up 14.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Arthur J Gallagher  vs.  CorVel Corp

Arthur J Gallagher

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arthur J Gallagher has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CorVel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CorVel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Arthur J and CorVel Corp

The main advantage of trading using opposite Arthur J and CorVel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arthur J position performs unexpectedly, CorVel Corp 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 CorVel Corp will offset losses from the drop in CorVel Corp's long position.

The idea behind Arthur J Gallagher and CorVel Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.