Correlation Between Trupanion and Ambac Financial
Can any of the company-specific risk be diversified away by investing in both Trupanion 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 Trupanion and Ambac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trupanion and Ambac Financial Group, you can compare the effects of market volatilities on Trupanion 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 Trupanion with a short position of Ambac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trupanion and Ambac Financial.
Diversification Opportunities for Trupanion and Ambac Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trupanion and Ambac is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion 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 Trupanion 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 Trupanion 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 Trupanion i.e., Trupanion and Ambac Financial go up and down completely randomly.
Pair Corralation between Trupanion and Ambac Financial
Assuming the 90 days horizon Trupanion is expected to generate 2.16 times more return on investment than Ambac Financial. However, Trupanion is 2.16 times more volatile than Ambac Financial Group. It trades about 0.0 of its potential returns per unit of risk. Ambac Financial Group is currently generating about -0.03 per unit of risk. If you would invest 5,378 in Trupanion on December 10, 2024 and sell it today you would lose (2,400) from holding Trupanion or give up 44.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trupanion vs. Ambac Financial Group
Performance |
| Timeline |
| Trupanion |
| Ambac Financial Group |
Trupanion and Ambac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trupanion and Ambac Financial
The main advantage of trading using opposite Trupanion and Ambac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trupanion 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.| Trupanion vs. Zoom Video Communications | Trupanion vs. Yanzhou Coal Mining | Trupanion vs. Globex Mining Enterprises | Trupanion vs. Perseus Mining Limited |
| Ambac Financial vs. CAREER EDUCATION | Ambac Financial vs. Grand Canyon Education | Ambac Financial vs. Corporate Travel Management | Ambac Financial vs. Laureate Education |
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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