Correlation Between Stewart Information and Kemper

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

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

Diversification Opportunities for Stewart Information and Kemper

-0.04

Correlation Coefficient

Stewart Information  Kemper

Good diversification

The 3 months correlation between Stewart and Kemper is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and Kemper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kemper and Stewart Information 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 Stewart Information Services are associated (or correlated) with Kemper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kemper has no effect on the direction of Stewart Information i.e., Stewart Information and Kemper go up and down completely randomly.

Pair Corralation between Stewart Information and Kemper

Considering the 90-day investment horizon Stewart Information is expected to generate 2.25 times less return on investment than Kemper. In addition to that, Stewart Information is 1.39 times more volatile than Kemper. It trades about 0.04 of its total potential returns per unit of risk. Kemper is currently generating about 0.12 per unit of volatility. If you would invest  5,997  in Kemper on August 9, 2024 and sell it today you would earn a total of  626.00  from holding Kemper or generate 10.44% return on investment over 90 days.

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

Stewart Information Services  vs.  Kemper

Stewart Information

Risk-Adjusted Performance

3 of 100

Insignificant

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.

Kemper

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kemper are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Kemper may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Stewart Information and Kemper

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

The idea behind Stewart Information Services and Kemper 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.