Correlation Between Progressive Corp and RLI Corp

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

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

Diversification Opportunities for Progressive Corp and RLI Corp

0.91

Correlation Coefficient

Progressive Corp  RLI Corp

Almost no diversification

The 3 months correlation between Progressive and RLI is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp and RLI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLI Corp and Progressive Corp 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 Progressive Corp are associated (or correlated) with RLI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLI Corp has no effect on the direction of Progressive Corp i.e., Progressive Corp and RLI Corp go up and down completely randomly.

Pair Corralation between Progressive Corp and RLI Corp

Considering the 90-day investment horizon Progressive Corp is expected to under-perform the RLI Corp. But the stock apears to be less risky and, when comparing its historical volatility, Progressive Corp is 1.01 times less risky than RLI Corp. The stock trades about -0.18 of its potential returns per unit of risk. The RLI Corp is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  6,664  in RLI Corp on August 3, 2025 and sell it today you would lose (768.00) from holding RLI Corp or give up 11.52% of portfolio value over 90 days.

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

Progressive Corp  vs.  RLI Corp

Progressive Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Progressive Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in December 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

RLI Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days RLI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential 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 Progressive Corp and RLI Corp

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

The idea behind Progressive Corp and RLI 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.

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.