Correlation Between Everest and Hamilton Insurance
Can any of the company-specific risk be diversified away by investing in both Everest and Hamilton Insurance 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 Everest and Hamilton Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everest Group and Hamilton Insurance Group,, you can compare the effects of market volatilities on Everest and Hamilton Insurance 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 Everest with a short position of Hamilton Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everest and Hamilton Insurance.
Diversification Opportunities for Everest and Hamilton Insurance
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Everest and Hamilton is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, and Everest 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 Everest Group are associated (or correlated) with Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Everest i.e., Everest and Hamilton Insurance go up and down completely randomly.
Pair Corralation between Everest and Hamilton Insurance
Allowing for the 90-day total investment horizon Everest is expected to generate 2.94 times less return on investment than Hamilton Insurance. In addition to that, Everest is 1.15 times more volatile than Hamilton Insurance Group,. It trades about 0.07 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.23 per unit of volatility. If you would invest 1,753 in Hamilton Insurance Group, on August 26, 2024 and sell it today you would earn a total of 147.00 from holding Hamilton Insurance Group, or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everest Group vs. Hamilton Insurance Group,
Performance |
| Timeline |
| Everest Group |
| Hamilton Insurance Group, |
Everest and Hamilton Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everest and Hamilton Insurance
The main advantage of trading using opposite Everest and Hamilton Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest position performs unexpectedly, Hamilton Insurance 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 Hamilton Insurance will offset losses from the drop in Hamilton Insurance's long position.| Everest vs. Hamilton Insurance Group, | Everest vs. Brookfield Wealth Solutions | Everest vs. Reinsurance Group of | Everest vs. Renaissancere Holdings |
| Hamilton Insurance vs. Brookfield Wealth Solutions | Hamilton Insurance vs. Reinsurance Group of | Hamilton Insurance vs. Renaissancere Holdings | Hamilton Insurance vs. Greenlight Capital Re |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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