Correlation Between AMERISAFE and Hippo Holdings
Can any of the company-specific risk be diversified away by investing in both AMERISAFE and Hippo Holdings 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 Hippo Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMERISAFE and Hippo Holdings, you can compare the effects of market volatilities on AMERISAFE and Hippo Holdings 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 Hippo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERISAFE and Hippo Holdings.
Diversification Opportunities for AMERISAFE and Hippo Holdings
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMERISAFE and Hippo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AMERISAFE and Hippo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hippo Holdings 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 Hippo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hippo Holdings has no effect on the direction of AMERISAFE i.e., AMERISAFE and Hippo Holdings go up and down completely randomly.
Pair Corralation between AMERISAFE and Hippo Holdings
Given the investment horizon of 90 days AMERISAFE is expected to generate 8.42 times less return on investment than Hippo Holdings. But when comparing it to its historical volatility, AMERISAFE is 3.51 times less risky than Hippo Holdings. It trades about 0.17 of its potential returns per unit of risk. Hippo Holdings is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,938 in Hippo Holdings on August 28, 2024 and sell it today you would earn a total of 1,361 from holding Hippo Holdings or generate 70.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMERISAFE vs. Hippo Holdings
Performance |
| Timeline |
| AMERISAFE |
| Hippo Holdings |
AMERISAFE and Hippo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERISAFE and Hippo Holdings
The main advantage of trading using opposite AMERISAFE and Hippo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERISAFE position performs unexpectedly, Hippo Holdings 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 Hippo Holdings will offset losses from the drop in Hippo Holdings' long position.| AMERISAFE vs. Assured Guaranty | AMERISAFE vs. MBIA Inc | AMERISAFE vs. Enact Holdings | AMERISAFE vs. ICC Holdings |
| Hippo Holdings vs. ICC Holdings | Hippo Holdings vs. Employers Holdings | Hippo Holdings vs. AMERISAFE | Hippo Holdings vs. NMI 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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