Correlation Between Old Republic and Acme United
Can any of the company-specific risk be diversified away by investing in both Old Republic and Acme United 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 Old Republic and Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Acme United, you can compare the effects of market volatilities on Old Republic and Acme United 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 Old Republic with a short position of Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Acme United.
Diversification Opportunities for Old Republic and Acme United
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Acme is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United and Old Republic 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 Old Republic International are associated (or correlated) with Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Old Republic i.e., Old Republic and Acme United go up and down completely randomly.
Pair Corralation between Old Republic and Acme United
Considering the 90-day investment horizon Old Republic International is expected to generate 0.65 times more return on investment than Acme United. However, Old Republic International is 1.54 times less risky than Acme United. It trades about 0.19 of its potential returns per unit of risk. Acme United is currently generating about 0.1 per unit of risk. If you would invest 3,533 in Old Republic International on September 3, 2024 and sell it today you would earn a total of 364.00 from holding Old Republic International or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Acme United
Performance |
| Timeline |
| Old Republic Interna |
| Acme United |
Old Republic and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Acme United
The main advantage of trading using opposite Old Republic and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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