Correlation Between Enstar Group and Global Indemnity
Can any of the company-specific risk be diversified away by investing in both Enstar Group and Global Indemnity 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 Enstar Group and Global Indemnity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enstar Group Limited and Global Indemnity PLC, you can compare the effects of market volatilities on Enstar Group and Global Indemnity 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 Enstar Group with a short position of Global Indemnity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enstar Group and Global Indemnity.
Diversification Opportunities for Enstar Group and Global Indemnity
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enstar and Global is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Enstar Group Limited and Global Indemnity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Indemnity PLC and Enstar Group 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 Enstar Group Limited are associated (or correlated) with Global Indemnity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Indemnity PLC has no effect on the direction of Enstar Group i.e., Enstar Group and Global Indemnity go up and down completely randomly.
Pair Corralation between Enstar Group and Global Indemnity
Given the investment horizon of 90 days Enstar Group Limited is expected to under-perform the Global Indemnity. But the stock apears to be less risky and, when comparing its historical volatility, Enstar Group Limited is 3.72 times less risky than Global Indemnity. The stock trades about 0.0 of its potential returns per unit of risk. The Global Indemnity PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Global Indemnity PLC on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Global Indemnity PLC or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enstar Group Limited vs. Global Indemnity PLC
Performance |
| Timeline |
| Enstar Group Limited |
| Global Indemnity PLC |
Enstar Group and Global Indemnity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enstar Group and Global Indemnity
The main advantage of trading using opposite Enstar Group and Global Indemnity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enstar Group position performs unexpectedly, Global Indemnity 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 Global Indemnity will offset losses from the drop in Global Indemnity's long position.| Enstar Group vs. Global Indemnity PLC | Enstar Group vs. Erie Indemnity | Enstar Group vs. AMERISAFE | Enstar Group vs. Diamond Hill Investment |
| Global Indemnity vs. Fiverr International | Global Indemnity vs. Pinterest | Global Indemnity vs. Upstart Holdings | Global Indemnity vs. Fastly Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |