Correlation Between AmTrust Financial and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and ArcelorMittal 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 ArcelorMittal 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 ArcelorMittal SA ADR, you can compare the effects of market volatilities on AmTrust Financial and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and ArcelorMittal.
Diversification Opportunities for AmTrust Financial and ArcelorMittal
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AmTrust and ArcelorMittal is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and ArcelorMittal SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA ADR 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA ADR has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and ArcelorMittal go up and down completely randomly.
Pair Corralation between AmTrust Financial and ArcelorMittal
Assuming the 90 days horizon AmTrust Financial Services is expected to generate 0.91 times more return on investment than ArcelorMittal. However, AmTrust Financial Services is 1.1 times less risky than ArcelorMittal. It trades about 0.08 of its potential returns per unit of risk. ArcelorMittal SA ADR is currently generating about -0.01 per unit of risk. If you would invest 1,093 in AmTrust Financial Services on September 12, 2024 and sell it today you would earn a total of 357.00 from holding AmTrust Financial Services or generate 32.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmTrust Financial Services vs. ArcelorMittal SA ADR
Performance |
| Timeline |
| AmTrust Financial |
| ArcelorMittal SA ADR |
AmTrust Financial and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmTrust Financial and ArcelorMittal
The main advantage of trading using opposite AmTrust Financial and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal'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 |
| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Ternium SA ADR | ArcelorMittal vs. Gerdau SA ADR | ArcelorMittal vs. POSCO 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges |