Correlation Between AMERISAFE and Fundamental Global
Can any of the company-specific risk be diversified away by investing in both AMERISAFE and Fundamental Global 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 AMERISAFE and Fundamental Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMERISAFE and Fundamental Global, you can compare the effects of market volatilities on AMERISAFE and Fundamental Global 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 AMERISAFE with a short position of Fundamental Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERISAFE and Fundamental Global.
Diversification Opportunities for AMERISAFE and Fundamental Global
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMERISAFE and Fundamental is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AMERISAFE and Fundamental Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Global and AMERISAFE 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 AMERISAFE are associated (or correlated) with Fundamental Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Global has no effect on the direction of AMERISAFE i.e., AMERISAFE and Fundamental Global go up and down completely randomly.
Pair Corralation between AMERISAFE and Fundamental Global
Given the investment horizon of 90 days AMERISAFE is expected to generate 7.11 times less return on investment than Fundamental Global. But when comparing it to its historical volatility, AMERISAFE is 7.39 times less risky than Fundamental Global. It trades about 0.17 of its potential returns per unit of risk. Fundamental Global is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,333 in Fundamental Global on August 28, 2024 and sell it today you would earn a total of 769.00 from holding Fundamental Global or generate 32.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMERISAFE vs. Fundamental Global
Performance |
| Timeline |
| AMERISAFE |
| Fundamental Global |
AMERISAFE and Fundamental Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERISAFE and Fundamental Global
The main advantage of trading using opposite AMERISAFE and Fundamental Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERISAFE position performs unexpectedly, Fundamental Global 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 Fundamental Global will offset losses from the drop in Fundamental Global's long position.| AMERISAFE vs. Assured Guaranty | AMERISAFE vs. MBIA Inc | AMERISAFE vs. Enact Holdings | AMERISAFE vs. ICC Holdings |
| Fundamental Global vs. International General Insurance | Fundamental Global vs. BB Seguridade Participacoes | Fundamental Global vs. Goosehead Insurance | Fundamental Global vs. Enstar Group Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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