Correlation Between Donegal Group and CSP

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

By analyzing existing cross correlation between Donegal Group A and CSP Inc, you can compare the effects of market volatilities on Donegal Group and CSP 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 Donegal Group with a short position of CSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Group and CSP.

Diversification Opportunities for Donegal Group and CSP

0.75

Correlation Coefficient

Donegal Group  CSP

Poor diversification

The 3 months correlation between Donegal and CSP is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Group A and CSP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP Inc and Donegal Group 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 Donegal Group A are associated (or correlated) with CSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Inc has no effect on the direction of Donegal Group i.e., Donegal Group and CSP go up and down completely randomly.

Pair Corralation between Donegal Group and CSP

Assuming the 90 days horizon Donegal Group A is expected to generate 0.4 times more return on investment than CSP. However, Donegal Group A is 2.52 times less risky than CSP. It trades about -0.12 of its potential returns per unit of risk. CSP Inc is currently generating about -0.13 per unit of risk. If you would invest  1,957  in Donegal Group A on May 13, 2025 and sell it today you would lose (243.00) from holding Donegal Group A or give up 12.42% of portfolio value over 90 days.

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

Donegal Group A  vs.  CSP Inc

Donegal Group A

Risk-Adjusted Performance

Weakest

Over the last 90 days Donegal Group A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CSP Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days CSP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Donegal Group and CSP

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

The idea behind Donegal Group A and CSP Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.