Correlation Between Hippo Holdings and Ambac Financial
Can any of the company-specific risk be diversified away by investing in both Hippo Holdings and Ambac 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 Hippo Holdings and Ambac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hippo Holdings and Ambac Financial Group, you can compare the effects of market volatilities on Hippo Holdings and Ambac 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 Hippo Holdings with a short position of Ambac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hippo Holdings and Ambac Financial.
Diversification Opportunities for Hippo Holdings and Ambac Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hippo and Ambac is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hippo Holdings and Ambac Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambac Financial Group and Hippo Holdings 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 Hippo Holdings are associated (or correlated) with Ambac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambac Financial Group has no effect on the direction of Hippo Holdings i.e., Hippo Holdings and Ambac Financial go up and down completely randomly.
Pair Corralation between Hippo Holdings and Ambac Financial
Given the investment horizon of 90 days Hippo Holdings is expected to generate 2.27 times more return on investment than Ambac Financial. However, Hippo Holdings is 2.27 times more volatile than Ambac Financial Group. It trades about 0.41 of its potential returns per unit of risk. Ambac Financial Group is currently generating about 0.2 per unit of risk. If you would invest 1,938 in Hippo Holdings on August 28, 2024 and sell it today you would earn a total of 1,361 from holding Hippo Holdings or generate 70.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hippo Holdings vs. Ambac Financial Group
Performance |
| Timeline |
| Hippo Holdings |
| Ambac Financial Group |
Hippo Holdings and Ambac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hippo Holdings and Ambac Financial
The main advantage of trading using opposite Hippo Holdings and Ambac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hippo Holdings position performs unexpectedly, Ambac 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 Ambac Financial will offset losses from the drop in Ambac Financial's long position.| Hippo Holdings vs. ICC Holdings | Hippo Holdings vs. Employers Holdings | Hippo Holdings vs. AMERISAFE | Hippo Holdings vs. NMI Holdings |
| Ambac Financial vs. Employers Holdings | Ambac Financial vs. James River Group | Ambac Financial vs. Assured Guaranty | Ambac Financial vs. ICC Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |