Correlation Between AmTrust Financial and Brandes Emerging

Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and Brandes Emerging 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 AmTrust Financial and Brandes Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AmTrust Financial Services and Brandes Emerging Markets, you can compare the effects of market volatilities on AmTrust Financial and Brandes Emerging 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 AmTrust Financial with a short position of Brandes Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and Brandes Emerging.

Diversification Opportunities for AmTrust Financial and Brandes Emerging

-0.63

Correlation Coefficient

AmTrust Financial  Brandes Emerging

Excellent diversification

The 3 months correlation between AmTrust and Brandes is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and Brandes Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Emerging Markets and AmTrust Financial 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 AmTrust Financial Services are associated (or correlated) with Brandes Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Emerging Markets has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and Brandes Emerging go up and down completely randomly.

Pair Corralation between AmTrust Financial and Brandes Emerging

If you would invest  1,575  in AmTrust Financial Services on January 26, 2024 and sell it today you would earn a total of  0.00  from holding AmTrust Financial Services or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

AmTrust Financial Services  vs.  Brandes Emerging Markets

AmTrust Financial

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days AmTrust Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, AmTrust Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Brandes Emerging Markets

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brandes Emerging Markets are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Brandes Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AmTrust Financial and Brandes Emerging

The main advantage of trading using opposite AmTrust Financial and Brandes Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, Brandes Emerging 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 Brandes Emerging will offset losses from the drop in Brandes Emerging's long position.

The idea behind AmTrust Financial Services and Brandes Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.