Correlation Between First Acceptance and American Coastal
Can any of the company-specific risk be diversified away by investing in both First Acceptance and American Coastal 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 First Acceptance and American Coastal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Acceptance Corp and American Coastal Insurance, you can compare the effects of market volatilities on First Acceptance and American Coastal 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 First Acceptance with a short position of American Coastal. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Acceptance and American Coastal.
Diversification Opportunities for First Acceptance and American Coastal
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and American is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding First Acceptance Corp and American Coastal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Coastal Ins and First Acceptance 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 First Acceptance Corp are associated (or correlated) with American Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Coastal Ins has no effect on the direction of First Acceptance i.e., First Acceptance and American Coastal go up and down completely randomly.
Pair Corralation between First Acceptance and American Coastal
If you would invest 1,215 in American Coastal Insurance on September 1, 2024 and sell it today you would earn a total of 158.00 from holding American Coastal Insurance or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Acceptance Corp vs. American Coastal Insurance
Performance |
| Timeline |
| First Acceptance Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Coastal Ins |
First Acceptance and American Coastal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Acceptance and American Coastal
The main advantage of trading using opposite First Acceptance and American Coastal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Acceptance position performs unexpectedly, American Coastal 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 American Coastal will offset losses from the drop in American Coastal's long position.| First Acceptance vs. Essent Group | First Acceptance vs. James River Group | First Acceptance vs. MGIC Investment Corp | First Acceptance vs. Employers Holdings |
| American Coastal vs. Selective Insurance Group | American Coastal vs. Aquagold International | American Coastal vs. Thrivent High Yield | American Coastal vs. Morningstar Unconstrained Allocation |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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