Correlation Between Arch Capital and Assicurazioni Generali
Can any of the company-specific risk be diversified away by investing in both Arch Capital and Assicurazioni Generali 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 Assicurazioni Generali 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 Assicurazioni Generali SpA, you can compare the effects of market volatilities on Arch Capital and Assicurazioni Generali 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 Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arch Capital and Assicurazioni Generali.
Diversification Opportunities for Arch Capital and Assicurazioni Generali
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arch and Assicurazioni is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Arch Capital Group and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali 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 Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of Arch Capital i.e., Arch Capital and Assicurazioni Generali go up and down completely randomly.
Pair Corralation between Arch Capital and Assicurazioni Generali
Assuming the 90 days horizon Arch Capital is expected to generate 3.79 times less return on investment than Assicurazioni Generali. But when comparing it to its historical volatility, Arch Capital Group is 1.08 times less risky than Assicurazioni Generali. It trades about 0.03 of its potential returns per unit of risk. Assicurazioni Generali SpA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 865.00 in Assicurazioni Generali SpA on August 27, 2024 and sell it today you would earn a total of 563.00 from holding Assicurazioni Generali SpA or generate 65.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arch Capital Group vs. Assicurazioni Generali SpA
Performance |
| Timeline |
| Arch Capital Group |
| Assicurazioni Generali |
Arch Capital and Assicurazioni Generali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arch Capital and Assicurazioni Generali
The main advantage of trading using opposite Arch Capital and Assicurazioni Generali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arch Capital position performs unexpectedly, Assicurazioni Generali 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 Assicurazioni Generali will offset losses from the drop in Assicurazioni Generali's long position.| Arch Capital vs. Enstar Group Limited | Arch Capital vs. Equitable Holdings | Arch Capital vs. Athene Holding | Arch Capital vs. Berkshire Hathaway |
| Assicurazioni Generali vs. AXA SA | Assicurazioni Generali vs. Athene Holding | Assicurazioni Generali vs. Athene Holding | Assicurazioni Generali vs. Arch Capital Group |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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