Correlation Between Arch Capital and Old Republic
Can any of the company-specific risk be diversified away by investing in both Arch Capital and Old Republic 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 Arch Capital and Old Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arch Capital Group and Old Republic International, you can compare the effects of market volatilities on Arch Capital and Old Republic 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 Arch Capital with a short position of Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arch Capital and Old Republic.
Diversification Opportunities for Arch Capital and Old Republic
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arch and Old is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Arch Capital Group and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna and Arch 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 Arch Capital Group are associated (or correlated) with Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of Arch Capital i.e., Arch Capital and Old Republic go up and down completely randomly.
Pair Corralation between Arch Capital and Old Republic
Given the investment horizon of 90 days Arch Capital is expected to generate 78.95 times less return on investment than Old Republic. In addition to that, Arch Capital is 1.92 times more volatile than Old Republic International. It trades about 0.0 of its total potential returns per unit of risk. Old Republic International is currently generating about 0.38 per unit of volatility. If you would invest 3,530 in Old Republic International on August 28, 2024 and sell it today you would earn a total of 350.00 from holding Old Republic International or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arch Capital Group vs. Old Republic International
Performance |
| Timeline |
| Arch Capital Group |
| Old Republic Interna |
Arch Capital and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arch Capital and Old Republic
The main advantage of trading using opposite Arch Capital and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arch Capital position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic's long position.| Arch Capital vs. Axa Equitable Holdings | Arch Capital vs. American International Group | Arch Capital vs. Old Republic International | Arch Capital vs. Sun Life Financial |
| Old Republic vs. Fiverr International | Old Republic vs. Pinterest | Old Republic vs. Upstart Holdings | Old Republic vs. Fastly Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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