Correlation Between Fundamental Global and Arch Capital
Can any of the company-specific risk be diversified away by investing in both Fundamental Global 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 Fundamental Global and Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Global and Arch Capital Group, you can compare the effects of market volatilities on Fundamental Global 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 Fundamental Global with a short position of Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Global and Arch Capital.
Diversification Opportunities for Fundamental Global and Arch Capital
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fundamental and Arch is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Global 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 Fundamental Global 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 Fundamental Global 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 Fundamental Global i.e., Fundamental Global and Arch Capital go up and down completely randomly.
Pair Corralation between Fundamental Global and Arch Capital
Considering the 90-day investment horizon Fundamental Global is expected to generate 19.51 times more return on investment than Arch Capital. However, Fundamental Global is 19.51 times more volatile than Arch Capital Group. It trades about 0.15 of its potential returns per unit of risk. Arch Capital Group is currently generating about -0.18 per unit of risk. If you would invest 2,333 in Fundamental Global on August 27, 2024 and sell it today you would earn a total of 637.00 from holding Fundamental Global or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Global vs. Arch Capital Group
Performance |
| Timeline |
| Fundamental Global |
| Arch Capital Group |
Fundamental Global and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Global and Arch Capital
The main advantage of trading using opposite Fundamental Global and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Global 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.| Fundamental Global vs. International General Insurance | Fundamental Global vs. BB Seguridade Participacoes | Fundamental Global vs. Goosehead Insurance | Fundamental Global vs. Enstar Group Limited |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |