Correlation Between Ambac Financial and AMERISAFE
Can any of the company-specific risk be diversified away by investing in both Ambac Financial and AMERISAFE 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 Ambac Financial and AMERISAFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambac Financial Group and AMERISAFE, you can compare the effects of market volatilities on Ambac Financial and AMERISAFE 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 Ambac Financial with a short position of AMERISAFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambac Financial and AMERISAFE.
Diversification Opportunities for Ambac Financial and AMERISAFE
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ambac and AMERISAFE is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ambac Financial Group and AMERISAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERISAFE and Ambac 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 Ambac Financial Group are associated (or correlated) with AMERISAFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERISAFE has no effect on the direction of Ambac Financial i.e., Ambac Financial and AMERISAFE go up and down completely randomly.
Pair Corralation between Ambac Financial and AMERISAFE
Given the investment horizon of 90 days Ambac Financial Group is expected to under-perform the AMERISAFE. In addition to that, Ambac Financial is 1.54 times more volatile than AMERISAFE. It trades about -0.24 of its total potential returns per unit of risk. AMERISAFE is currently generating about -0.13 per unit of volatility. If you would invest 5,154 in AMERISAFE on November 1, 2024 and sell it today you would lose (167.00) from holding AMERISAFE or give up 3.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambac Financial Group vs. AMERISAFE
Performance |
| Timeline |
| Ambac Financial Group |
| AMERISAFE |
Ambac Financial and AMERISAFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambac Financial and AMERISAFE
The main advantage of trading using opposite Ambac Financial and AMERISAFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambac Financial position performs unexpectedly, AMERISAFE 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 AMERISAFE will offset losses from the drop in AMERISAFE's long position.| Ambac Financial vs. Employers Holdings | Ambac Financial vs. James River Group | Ambac Financial vs. Assured Guaranty | Ambac Financial vs. ICC Holdings |
| AMERISAFE vs. Assured Guaranty | AMERISAFE vs. MBIA Inc | AMERISAFE vs. Enact Holdings | AMERISAFE vs. ICC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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