Correlation Between Assicurazioni Generali and Arch Capital
Can any of the company-specific risk be diversified away by investing in both Assicurazioni Generali and Arch Capital 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 Assicurazioni Generali and Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assicurazioni Generali SpA and Arch Capital Group, you can compare the effects of market volatilities on Assicurazioni Generali and Arch Capital 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 Assicurazioni Generali with a short position of Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assicurazioni Generali and Arch Capital.
Diversification Opportunities for Assicurazioni Generali and Arch Capital
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Assicurazioni and Arch is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Assicurazioni Generali SpA and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group and Assicurazioni Generali 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 Assicurazioni Generali SpA are associated (or correlated) with Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of Assicurazioni Generali i.e., Assicurazioni Generali and Arch Capital go up and down completely randomly.
Pair Corralation between Assicurazioni Generali and Arch Capital
Assuming the 90 days horizon Assicurazioni Generali SpA is expected to generate 1.95 times more return on investment than Arch Capital. However, Assicurazioni Generali is 1.95 times more volatile than Arch Capital Group. It trades about 0.13 of its potential returns per unit of risk. Arch Capital Group is currently generating about 0.04 per unit of risk. If you would invest 1,415 in Assicurazioni Generali SpA on August 24, 2024 and sell it today you would earn a total of 1,343 from holding Assicurazioni Generali SpA or generate 94.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
Assicurazioni Generali SpA vs. Arch Capital Group
Performance |
| Timeline |
| Assicurazioni Generali |
| Arch Capital Group |
Assicurazioni Generali and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assicurazioni Generali and Arch Capital
The main advantage of trading using opposite Assicurazioni Generali and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assicurazioni Generali position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| Assicurazioni Generali vs. ageas SANV | Assicurazioni Generali vs. AXA SA | Assicurazioni Generali vs. Sampo OYJ | Assicurazioni Generali vs. Zurich Insurance Group |
| Arch Capital vs. Athene Holding | Arch Capital vs. The Hartford Financial | Arch Capital vs. Arch Capital Group | Arch Capital vs. Athene Holding |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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