Correlation Between Enact Holdings and Tiptree
Can any of the company-specific risk be diversified away by investing in both Enact Holdings and Tiptree 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 Tiptree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enact Holdings and Tiptree, you can compare the effects of market volatilities on Enact Holdings and Tiptree 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 Tiptree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enact Holdings and Tiptree.
Diversification Opportunities for Enact Holdings and Tiptree
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enact and Tiptree is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Enact Holdings and Tiptree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiptree 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 Tiptree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiptree has no effect on the direction of Enact Holdings i.e., Enact Holdings and Tiptree go up and down completely randomly.
Pair Corralation between Enact Holdings and Tiptree
Considering the 90-day investment horizon Enact Holdings is expected to generate 3.38 times less return on investment than Tiptree. But when comparing it to its historical volatility, Enact Holdings is 1.06 times less risky than Tiptree. It trades about 0.09 of its potential returns per unit of risk. Tiptree is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,965 in Tiptree on August 28, 2024 and sell it today you would earn a total of 230.00 from holding Tiptree or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enact Holdings vs. Tiptree
Performance |
| Timeline |
| Enact Holdings |
| Tiptree |
Enact Holdings and Tiptree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enact Holdings and Tiptree
The main advantage of trading using opposite Enact Holdings and Tiptree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enact Holdings position performs unexpectedly, Tiptree 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 Tiptree will offset losses from the drop in Tiptree's long position.| Enact Holdings vs. Assured Guaranty | Enact Holdings vs. AMERISAFE | Enact Holdings vs. MBIA Inc | Enact Holdings vs. ICC Holdings |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |