Correlation Between SmileDirectClub and Selective Insurance

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

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

Diversification Opportunities for SmileDirectClub and Selective Insurance

0.0

Correlation Coefficient

SmileDirectClub  Selective Insurance

Pay attention - limited upside

The 3 months correlation between SmileDirectClub and Selective is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SmileDirectClub and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance and SmileDirectClub 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 SmileDirectClub 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 SmileDirectClub i.e., SmileDirectClub and Selective Insurance go up and down completely randomly.

Pair Corralation between SmileDirectClub and Selective Insurance

If you would invest (100.00) in SmileDirectClub on May 2, 2025 and sell it today you would earn a total of  100.00  from holding SmileDirectClub or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SmileDirectClub  vs.  Selective Insurance Group

SmileDirectClub

Risk-Adjusted Performance

Very Weak

Over the last 90 days SmileDirectClub has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, SmileDirectClub is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

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 SmileDirectClub and Selective Insurance

The main advantage of trading using opposite SmileDirectClub and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmileDirectClub 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 SmileDirectClub 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.