Correlation Between American International and Fidelis Insurance
Can any of the company-specific risk be diversified away by investing in both American International and Fidelis Insurance 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 American International and Fidelis Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American International Group and Fidelis Insurance Holdings, you can compare the effects of market volatilities on American International and Fidelis Insurance 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 American International with a short position of Fidelis Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Fidelis Insurance.
Diversification Opportunities for American International and Fidelis Insurance
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Fidelis is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Fidelis Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelis Insurance and American International 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 American International Group are associated (or correlated) with Fidelis Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelis Insurance has no effect on the direction of American International i.e., American International and Fidelis Insurance go up and down completely randomly.
Pair Corralation between American International and Fidelis Insurance
Considering the 90-day investment horizon American International Group is expected to under-perform the Fidelis Insurance. But the stock apears to be less risky and, when comparing its historical volatility, American International Group is 2.24 times less risky than Fidelis Insurance. The stock trades about -0.09 of its potential returns per unit of risk. The Fidelis Insurance Holdings is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,754 in Fidelis Insurance Holdings on August 27, 2024 and sell it today you would earn a total of 305.00 from holding Fidelis Insurance Holdings or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American International Group vs. Fidelis Insurance Holdings
Performance |
| Timeline |
| American International |
| Fidelis Insurance |
American International and Fidelis Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American International and Fidelis Insurance
The main advantage of trading using opposite American International and Fidelis Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International position performs unexpectedly, Fidelis Insurance 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 Fidelis Insurance will offset losses from the drop in Fidelis Insurance's long position.| American International vs. Axa Equitable Holdings | American International vs. Arch Capital Group | American International vs. Old Republic International | American International vs. Sun Life Financial |
| Fidelis Insurance vs. Enstar Group Limited | Fidelis Insurance vs. Aegon NV ADR | Fidelis Insurance vs. American International Group | Fidelis Insurance vs. Axa Equitable 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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