Correlation Between Climb Global and Selective Insurance

Can any of the company-specific risk be diversified away by investing in both Climb Global 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 Climb Global and Selective Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Climb Global Solutions and Selective Insurance Group, you can compare the effects of market volatilities on Climb Global 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 Climb Global with a short position of Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Climb Global and Selective Insurance.

Diversification Opportunities for Climb Global and Selective Insurance

0.3

Correlation Coefficient

Climb Global  Selective Insurance

Weak diversification

The 3 months correlation between Climb and Selective is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Climb Global Solutions and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and Climb Global 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 Climb Global Solutions 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 Climb Global i.e., Climb Global and Selective Insurance go up and down completely randomly.

Pair Corralation between Climb Global and Selective Insurance

Given the investment horizon of 90 days Climb Global Solutions is expected to generate 1.1 times more return on investment than Selective Insurance. However, Climb Global is 1.1 times more volatile than Selective Insurance Group. It trades about 0.1 of its potential returns per unit of risk. Selective Insurance Group is currently generating about -0.06 per unit of risk. If you would invest  10,111  in Climb Global Solutions on May 2, 2025 and sell it today you would earn a total of  1,689  from holding Climb Global Solutions or generate 16.7% return on investment over 90 days.

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

Climb Global Solutions  vs.  Selective Insurance Group

Climb Global Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Climb Global Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, Climb Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Selective Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Selective Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Climb Global and Selective Insurance

The main advantage of trading using opposite Climb Global and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Climb Global 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 Climb Global Solutions 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.