Correlation Between First Acceptance and HCI
Can any of the company-specific risk be diversified away by investing in both First Acceptance and HCI 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 HCI 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 HCI Group, you can compare the effects of market volatilities on First Acceptance and HCI 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 HCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Acceptance and HCI.
Diversification Opportunities for First Acceptance and HCI
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and HCI is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding First Acceptance Corp and HCI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCI Group 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 HCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCI Group has no effect on the direction of First Acceptance i.e., First Acceptance and HCI go up and down completely randomly.
Pair Corralation between First Acceptance and HCI
If you would invest 80.00 in First Acceptance Corp on August 25, 2024 and sell it today you would earn a total of 0.00 from holding First Acceptance Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
First Acceptance Corp vs. HCI Group
Performance |
| Timeline |
| First Acceptance Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HCI Group |
First Acceptance and HCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Acceptance and HCI
The main advantage of trading using opposite First Acceptance and HCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Acceptance position performs unexpectedly, HCI 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 HCI will offset losses from the drop in HCI'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 |
| HCI vs. Universal Insurance Holdings | HCI vs. Kingstone Companies | HCI vs. Horace Mann Educators | HCI vs. Heritage Insurance Hldgs |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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