Correlation Between Till Capital and Donegal Group

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

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

Diversification Opportunities for Till Capital and Donegal Group

-0.37

Correlation Coefficient

Till Capital  Donegal Group

Very good diversification

The 3 months correlation between Till and Donegal is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Till Capital and Donegal Group B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Group B and Till Capital 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 Till Capital are associated (or correlated) with Donegal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Group B has no effect on the direction of Till Capital i.e., Till Capital and Donegal Group go up and down completely randomly.

Pair Corralation between Till Capital and Donegal Group

If you would invest  1,271  in Donegal Group B on September 2, 2024 and sell it today you would earn a total of  180.00  from holding Donegal Group B or generate 14.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.85%
Values	Daily Returns

Till Capital  vs.  Donegal Group B

Till Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Till Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Till Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Donegal Group B

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Donegal Group B are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Donegal Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Till Capital and Donegal Group

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

The idea behind Till Capital and Donegal Group B 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.