Correlation Between AMERISAFE and American International
Can any of the company-specific risk be diversified away by investing in both AMERISAFE and American International 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 AMERISAFE and American International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMERISAFE and American International Group, you can compare the effects of market volatilities on AMERISAFE and American International 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 AMERISAFE with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERISAFE and American International.
Diversification Opportunities for AMERISAFE and American International
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMERISAFE and American is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AMERISAFE and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International and AMERISAFE 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 AMERISAFE are associated (or correlated) with American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of AMERISAFE i.e., AMERISAFE and American International go up and down completely randomly.
Pair Corralation between AMERISAFE and American International
Given the investment horizon of 90 days AMERISAFE is expected to under-perform the American International. In addition to that, AMERISAFE is 1.43 times more volatile than American International Group. It trades about -0.17 of its total potential returns per unit of risk. American International Group is currently generating about 0.03 per unit of volatility. If you would invest 7,437 in American International Group on March 7, 2024 and sell it today you would earn a total of 153.00 from holding American International Group or generate 2.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
AMERISAFE vs. American International Group
Performance |
Timeline |
AMERISAFE |
American International |
AMERISAFE and American International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMERISAFE and American International
The main advantage of trading using opposite AMERISAFE and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERISAFE position performs unexpectedly, American International 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 American International will offset losses from the drop in American International's long position.AMERISAFE vs. Assured Guaranty | AMERISAFE vs. MBIA Inc | AMERISAFE vs. Enact Holdings | AMERISAFE vs. ICC Holdings |
American International vs. Assicurazioni Generali SpA | American International vs. ageas SANV | American International vs. AXA SA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Transaction History View history of all your transactions and understand their impact on performance | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |