Correlation Between Atlantic American and Palomar Holdings
Can any of the company-specific risk be diversified away by investing in both Atlantic American and Palomar Holdings 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 Atlantic American and Palomar Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic American and Palomar Holdings, you can compare the effects of market volatilities on Atlantic American and Palomar Holdings 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 Atlantic American with a short position of Palomar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic American and Palomar Holdings.
Diversification Opportunities for Atlantic American and Palomar Holdings
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atlantic and Palomar is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic American and Palomar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palomar Holdings and Atlantic American 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 Atlantic American are associated (or correlated) with Palomar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palomar Holdings has no effect on the direction of Atlantic American i.e., Atlantic American and Palomar Holdings go up and down completely randomly.
Pair Corralation between Atlantic American and Palomar Holdings
Given the investment horizon of 90 days Atlantic American is expected to under-perform the Palomar Holdings. In addition to that, Atlantic American is 1.37 times more volatile than Palomar Holdings. It trades about -0.01 of its total potential returns per unit of risk. Palomar Holdings is currently generating about 0.11 per unit of volatility. If you would invest 5,911 in Palomar Holdings on August 24, 2024 and sell it today you would earn a total of 4,956 from holding Palomar Holdings or generate 83.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantic American vs. Palomar Holdings
Performance |
| Timeline |
| Atlantic American |
| Palomar Holdings |
Atlantic American and Palomar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic American and Palomar Holdings
The main advantage of trading using opposite Atlantic American and Palomar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic American position performs unexpectedly, Palomar Holdings 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 Palomar Holdings will offset losses from the drop in Palomar Holdings' long position.| Atlantic American vs. CNO Financial Group | Atlantic American vs. MetLife Preferred Stock | Atlantic American vs. FG Annuities Life | Atlantic American vs. Prudential Public Limited |
| Palomar Holdings vs. Horace Mann Educators | Palomar Holdings vs. Kemper | Palomar Holdings vs. RLI Corp | Palomar Holdings vs. Global Indemnity PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |