Correlation Between FTAC Emerald and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both FTAC Emerald and AmTrust Financial 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 FTAC Emerald and AmTrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAC Emerald Acquisition and AmTrust Financial Services, you can compare the effects of market volatilities on FTAC Emerald and AmTrust Financial 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 FTAC Emerald with a short position of AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAC Emerald and AmTrust Financial.
Diversification Opportunities for FTAC Emerald and AmTrust Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FTAC and AmTrust is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding FTAC Emerald Acquisition and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and FTAC Emerald 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 FTAC Emerald Acquisition are associated (or correlated) with AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of FTAC Emerald i.e., FTAC Emerald and AmTrust Financial go up and down completely randomly.
Pair Corralation between FTAC Emerald and AmTrust Financial
Considering the 90-day investment horizon FTAC Emerald is expected to generate 4.5 times less return on investment than AmTrust Financial. But when comparing it to its historical volatility, FTAC Emerald Acquisition is 4.11 times less risky than AmTrust Financial. It trades about 0.07 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,106 in AmTrust Financial Services on September 14, 2024 and sell it today you would earn a total of 369.00 from holding AmTrust Financial Services or generate 33.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAC Emerald Acquisition vs. AmTrust Financial Services
Performance |
| Timeline |
| FTAC Emerald Acquisition |
| AmTrust Financial |
FTAC Emerald and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAC Emerald and AmTrust Financial
The main advantage of trading using opposite FTAC Emerald and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAC Emerald position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.| FTAC Emerald vs. Ryanair Holdings PLC | FTAC Emerald vs. Lindblad Expeditions Holdings | FTAC Emerald vs. China Aircraft Leasing | FTAC Emerald vs. Delek Logistics Partners |
| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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