Correlation Between James River and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both James River and AXIS 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 James River and AXIS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James River Group and AXIS Capital Holdings, you can compare the effects of market volatilities on James River and AXIS 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 James River with a short position of AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of James River and AXIS Capital.
Diversification Opportunities for James River and AXIS Capital
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between James and AXIS is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding James River Group and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings and James River 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 James River Group are associated (or correlated) with AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of James River i.e., James River and AXIS Capital go up and down completely randomly.
Pair Corralation between James River and AXIS Capital
Given the investment horizon of 90 days James River Group is expected to under-perform the AXIS Capital. In addition to that, James River is 2.48 times more volatile than AXIS Capital Holdings. It trades about -0.04 of its total potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.16 per unit of volatility. If you would invest 5,299 in AXIS Capital Holdings on November 9, 2024 and sell it today you would earn a total of 4,120 from holding AXIS Capital Holdings or generate 77.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
James River Group vs. AXIS Capital Holdings
Performance |
| Timeline |
| James River Group |
| AXIS Capital Holdings |
James River and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James River and AXIS Capital
The main advantage of trading using opposite James River and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James River position performs unexpectedly, AXIS 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| James River vs. Employers Holdings | James River vs. Investors Title | James River vs. AMERISAFE | James River vs. Essent Group |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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