Correlation Between AmTrust Financial and Horace Mann
Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and Horace Mann 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 AmTrust Financial and Horace Mann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmTrust Financial Services and Horace Mann Educators, you can compare the effects of market volatilities on AmTrust Financial and Horace Mann 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 AmTrust Financial with a short position of Horace Mann. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and Horace Mann.
Diversification Opportunities for AmTrust Financial and Horace Mann
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AmTrust and Horace is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and Horace Mann Educators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horace Mann Educators and AmTrust Financial 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 AmTrust Financial Services are associated (or correlated) with Horace Mann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horace Mann Educators has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and Horace Mann go up and down completely randomly.
Pair Corralation between AmTrust Financial and Horace Mann
Assuming the 90 days horizon AmTrust Financial is expected to generate 19.28 times less return on investment than Horace Mann. But when comparing it to its historical volatility, AmTrust Financial Services is 1.9 times less risky than Horace Mann. It trades about 0.02 of its potential returns per unit of risk. Horace Mann Educators is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,740 in Horace Mann Educators on August 28, 2024 and sell it today you would earn a total of 387.00 from holding Horace Mann Educators or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmTrust Financial Services vs. Horace Mann Educators
Performance |
| Timeline |
| AmTrust Financial |
| Horace Mann Educators |
AmTrust Financial and Horace Mann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmTrust Financial and Horace Mann
The main advantage of trading using opposite AmTrust Financial and Horace Mann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, Horace Mann 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 Horace Mann will offset losses from the drop in Horace Mann's long position.| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. Aspen Insurance Holdings |
| Horace Mann vs. Kemper | Horace Mann vs. RLI Corp | Horace Mann vs. Global Indemnity PLC | Horace Mann vs. Argo Group International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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