Correlation Between Safety Insurance and ARMADA HOFFLER
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and ARMADA HOFFLER 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 Safety Insurance and ARMADA HOFFLER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and ARMADA HOFFLER PR, you can compare the effects of market volatilities on Safety Insurance and ARMADA HOFFLER 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 Safety Insurance with a short position of ARMADA HOFFLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and ARMADA HOFFLER.
Diversification Opportunities for Safety Insurance and ARMADA HOFFLER
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safety and ARMADA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and ARMADA HOFFLER PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARMADA HOFFLER PR and Safety 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 Safety Insurance Group are associated (or correlated) with ARMADA HOFFLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARMADA HOFFLER PR has no effect on the direction of Safety Insurance i.e., Safety Insurance and ARMADA HOFFLER go up and down completely randomly.
Pair Corralation between Safety Insurance and ARMADA HOFFLER
Assuming the 90 days horizon Safety Insurance Group is expected to under-perform the ARMADA HOFFLER. In addition to that, Safety Insurance is 1.76 times more volatile than ARMADA HOFFLER PR. It trades about -0.01 of its total potential returns per unit of risk. ARMADA HOFFLER PR is currently generating about 0.05 per unit of volatility. If you would invest 1,020 in ARMADA HOFFLER PR on September 16, 2024 and sell it today you would earn a total of 10.00 from holding ARMADA HOFFLER PR or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. ARMADA HOFFLER PR
Performance |
| Timeline |
| Safety Insurance |
| ARMADA HOFFLER PR |
Safety Insurance and ARMADA HOFFLER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and ARMADA HOFFLER
The main advantage of trading using opposite Safety Insurance and ARMADA HOFFLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, ARMADA HOFFLER 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 ARMADA HOFFLER will offset losses from the drop in ARMADA HOFFLER's long position.| Safety Insurance vs. Insurance Australia Group | Safety Insurance vs. Superior Plus Corp | Safety Insurance vs. SIVERS SEMICONDUCTORS AB | Safety Insurance vs. CHINA HUARONG ENERHD 50 |
| ARMADA HOFFLER vs. ZURICH INSURANCE GROUP | ARMADA HOFFLER vs. Goosehead Insurance | ARMADA HOFFLER vs. Ping An Insurance | ARMADA HOFFLER vs. Safety Insurance 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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