Correlation Between WR Berkley and Root

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

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

Diversification Opportunities for WR Berkley and Root

-0.46

Correlation Coefficient

WR Berkley  Root

Very good diversification

The 3 months correlation between WRB-PF and Root is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding WR Berkley and Root Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Root Inc and WR Berkley 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 WR Berkley are associated (or correlated) with Root. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Root Inc has no effect on the direction of WR Berkley i.e., WR Berkley and Root go up and down completely randomly.

Pair Corralation between WR Berkley and Root

Assuming the 90 days trading horizon WR Berkley is expected to generate 0.18 times more return on investment than Root. However, WR Berkley is 5.59 times less risky than Root. It trades about 0.08 of its potential returns per unit of risk. Root Inc is currently generating about -0.05 per unit of risk. If you would invest  1,914  in WR Berkley on April 23, 2025 and sell it today you would earn a total of  65.00  from holding WR Berkley or generate 3.4% return on investment over 90 days.

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

WR Berkley  vs.  Root Inc

WR Berkley

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WR Berkley are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, WR Berkley is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Root Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Root Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with WR Berkley and Root

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

The idea behind WR Berkley and Root 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..