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
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trupanion and Ambac is 0.62. 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
Given the investment horizon of 90 days Trupanion is expected to under-perform the Ambac Financial. In addition to that, Trupanion is 1.02 times more volatile than Ambac Financial Group. It trades about -0.01 of its total potential returns per unit of risk. Ambac Financial Group is currently generating about 0.19 per unit of volatility. If you would invest 1,144 in Ambac Financial Group on August 28, 2024 and sell it today you would earn a total of 138.00 from holding Ambac Financial Group or generate 12.06% return on investment 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. First American | Trupanion vs. Assurant | Trupanion vs. NMI Holdings | Trupanion vs. MGIC Investment Corp |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |