Correlation Between Ambac Financial and PMI
Can any of the company-specific risk be diversified away by investing in both Ambac Financial and PMI 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 PMI 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 The PMI Group, you can compare the effects of market volatilities on Ambac Financial and PMI 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 PMI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambac Financial and PMI.
Diversification Opportunities for Ambac Financial and PMI
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ambac and PMI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ambac Financial Group and The PMI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMI Group 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 PMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMI Group has no effect on the direction of Ambac Financial i.e., Ambac Financial and PMI go up and down completely randomly.
Pair Corralation between Ambac Financial and PMI
If you would invest 25.00 in The PMI Group on October 25, 2024 and sell it today you would earn a total of 0.00 from holding The PMI Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ambac Financial Group vs. The PMI Group
Performance |
| Timeline |
| Ambac Financial Group |
| PMI Group |
Ambac Financial and PMI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambac Financial and PMI
The main advantage of trading using opposite Ambac Financial and PMI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambac Financial position performs unexpectedly, PMI 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 PMI will offset losses from the drop in PMI's long position.| Ambac Financial vs. Employers Holdings | Ambac Financial vs. James River Group | Ambac Financial vs. Assured Guaranty | Ambac Financial vs. ICC Holdings |
| PMI vs. Ambac Financial Group | PMI vs. Assured Guaranty | PMI vs. Radian Group | PMI vs. MGIC Investment Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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