Correlation Between Fidelis Insurance and American International
Can any of the company-specific risk be diversified away by investing in both Fidelis Insurance and American International 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 Fidelis Insurance and American International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelis Insurance Holdings and American International Group, you can compare the effects of market volatilities on Fidelis Insurance and American International 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 Fidelis Insurance with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelis Insurance and American International.
Diversification Opportunities for Fidelis Insurance and American International
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fidelis and American is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fidelis Insurance Holdings and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International and Fidelis Insurance 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 Fidelis Insurance Holdings are associated (or correlated) with American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of Fidelis Insurance i.e., Fidelis Insurance and American International go up and down completely randomly.
Pair Corralation between Fidelis Insurance and American International
Given the investment horizon of 90 days Fidelis Insurance Holdings is expected to generate 2.17 times more return on investment than American International. However, Fidelis Insurance is 2.17 times more volatile than American International Group. It trades about 0.33 of its potential returns per unit of risk. American International Group is currently generating about -0.08 per unit of risk. If you would invest 1,742 in Fidelis Insurance Holdings on August 24, 2024 and sell it today you would earn a total of 311.00 from holding Fidelis Insurance Holdings or generate 17.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelis Insurance Holdings vs. American International Group
Performance |
| Timeline |
| Fidelis Insurance |
| American International |
Fidelis Insurance and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelis Insurance and American International
The main advantage of trading using opposite Fidelis Insurance and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelis Insurance position performs unexpectedly, American International 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 International will offset losses from the drop in American International's long position.| Fidelis Insurance vs. RBC Bearings Incorporated | Fidelis Insurance vs. EMCOR Group | Fidelis Insurance vs. CECO Environmental Corp | Fidelis Insurance vs. Everus Construction Group |
| American International vs. Axa Equitable Holdings | American International vs. Arch Capital Group | American International vs. Old Republic International | American International vs. Sun Life Financial |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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