Correlation Between Global Indemnity and Stewart Information

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

By analyzing existing cross correlation between Global Indemnity PLC and Stewart Information Services, you can compare the effects of market volatilities on Global Indemnity and Stewart Information 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 Global Indemnity with a short position of Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Indemnity and Stewart Information.

Diversification Opportunities for Global Indemnity and Stewart Information

-0.12

Correlation Coefficient

Global Indemnity  Stewart Information

Good diversification

The 3 months correlation between Global and Stewart is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global Indemnity PLC and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information and Global Indemnity 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 Global Indemnity PLC are associated (or correlated) with Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of Global Indemnity i.e., Global Indemnity and Stewart Information go up and down completely randomly.

Pair Corralation between Global Indemnity and Stewart Information

Given the investment horizon of 90 days Global Indemnity is expected to generate 28.59 times less return on investment than Stewart Information. In addition to that, Global Indemnity is 1.09 times more volatile than Stewart Information Services. It trades about 0.0 of its total potential returns per unit of risk. Stewart Information Services is currently generating about 0.06 per unit of volatility. If you would invest  4,236  in Stewart Information Services on May 6, 2025 and sell it today you would earn a total of  2,499  from holding Stewart Information Services or generate 58.99% return on investment over 90 days.

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

Global Indemnity PLC  vs.  Stewart Information Services

Global Indemnity PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Indemnity PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Global Indemnity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Stewart Information

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stewart Information Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Stewart Information is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Global Indemnity and Stewart Information

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

The idea behind Global Indemnity PLC and Stewart Information Services 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..