Correlation Between AmTrust Financial and BCE
Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and BCE 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 BCE 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 BCE Inc, you can compare the effects of market volatilities on AmTrust Financial and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and BCE.
Diversification Opportunities for AmTrust Financial and BCE
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AmTrust and BCE is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and BCE go up and down completely randomly.
Pair Corralation between AmTrust Financial and BCE
Assuming the 90 days horizon AmTrust Financial Services is expected to generate 1.88 times more return on investment than BCE. However, AmTrust Financial is 1.88 times more volatile than BCE Inc. It trades about 0.04 of its potential returns per unit of risk. BCE Inc is currently generating about -0.09 per unit of risk. If you would invest 1,125 in AmTrust Financial Services on September 2, 2024 and sell it today you would earn a total of 335.00 from holding AmTrust Financial Services or generate 29.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmTrust Financial Services vs. BCE Inc
Performance |
| Timeline |
| AmTrust Financial |
| BCE Inc |
AmTrust Financial and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmTrust Financial and BCE
The main advantage of trading using opposite AmTrust Financial and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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