Correlation Between AmTrust Financial and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and NioCorp Developments 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 NioCorp Developments 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 NioCorp Developments Ltd, you can compare the effects of market volatilities on AmTrust Financial and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and NioCorp Developments.
Diversification Opportunities for AmTrust Financial and NioCorp Developments
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AmTrust and NioCorp is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and NioCorp Developments go up and down completely randomly.
Pair Corralation between AmTrust Financial and NioCorp Developments
Assuming the 90 days horizon AmTrust Financial is expected to generate 7.1 times less return on investment than NioCorp Developments. But when comparing it to its historical volatility, AmTrust Financial Services is 2.15 times less risky than NioCorp Developments. It trades about 0.05 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 146.00 in NioCorp Developments Ltd on September 12, 2024 and sell it today you would earn a total of 26.00 from holding NioCorp Developments Ltd or generate 17.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmTrust Financial Services vs. NioCorp Developments Ltd
Performance |
| Timeline |
| AmTrust Financial |
| NioCorp Developments |
AmTrust Financial and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmTrust Financial and NioCorp Developments
The main advantage of trading using opposite AmTrust Financial and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' 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 |
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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.
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