Correlation Between Enact Holdings and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both Enact Holdings and AXIS Capital 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 Enact Holdings and AXIS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enact Holdings and AXIS Capital Holdings, you can compare the effects of market volatilities on Enact Holdings and AXIS Capital 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 Enact Holdings with a short position of AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enact Holdings and AXIS Capital.
Diversification Opportunities for Enact Holdings and AXIS Capital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enact and AXIS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Enact Holdings and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings and Enact Holdings 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 Enact Holdings are associated (or correlated) with AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of Enact Holdings i.e., Enact Holdings and AXIS Capital go up and down completely randomly.
Pair Corralation between Enact Holdings and AXIS Capital
Considering the 90-day investment horizon Enact Holdings is expected to under-perform the AXIS Capital. But the etf apears to be less risky and, when comparing its historical volatility, Enact Holdings is 1.28 times less risky than AXIS Capital. The etf trades about -0.08 of its potential returns per unit of risk. The AXIS Capital Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 9,343 in AXIS Capital Holdings on November 2, 2024 and sell it today you would lose (241.00) from holding AXIS Capital Holdings or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enact Holdings vs. AXIS Capital Holdings
Performance |
| Timeline |
| Enact Holdings |
| AXIS Capital Holdings |
Enact Holdings and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enact Holdings and AXIS Capital
The main advantage of trading using opposite Enact Holdings and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enact Holdings position performs unexpectedly, AXIS Capital 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| Enact Holdings vs. Assured Guaranty | Enact Holdings vs. AMERISAFE | Enact Holdings vs. MBIA Inc | Enact Holdings vs. ICC Holdings |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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