Correlation Between AmTrust Financial and HUNTINGTON

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Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and HUNTINGTON 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 HUNTINGTON 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 HUNTINGTON BANCSHARES INC, you can compare the effects of market volatilities on AmTrust Financial and HUNTINGTON 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 HUNTINGTON. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and HUNTINGTON.

Diversification Opportunities for AmTrust Financial and HUNTINGTON

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between AmTrust and HUNTINGTON is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and HUNTINGTON BANCSHARES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUNTINGTON BANCSHARES INC 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 HUNTINGTON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUNTINGTON BANCSHARES INC has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and HUNTINGTON go up and down completely randomly.

Pair Corralation between AmTrust Financial and HUNTINGTON

Assuming the 90 days horizon AmTrust Financial Services is expected to generate 4.76 times more return on investment than HUNTINGTON. However, AmTrust Financial is 4.76 times more volatile than HUNTINGTON BANCSHARES INC. It trades about 0.03 of its potential returns per unit of risk. HUNTINGTON BANCSHARES INC is currently generating about 0.0 per unit of risk. If you would invest  1,143  in AmTrust Financial Services on October 4, 2024 and sell it today you would earn a total of  307.00  from holding AmTrust Financial Services or generate 26.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy96.16%
ValuesDaily Returns

AmTrust Financial Services  vs.  HUNTINGTON BANCSHARES INC

 Performance 
       Timeline  
AmTrust Financial 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in AmTrust Financial Services are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, AmTrust Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.
HUNTINGTON BANCSHARES INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HUNTINGTON BANCSHARES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUNTINGTON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

AmTrust Financial and HUNTINGTON Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AmTrust Financial and HUNTINGTON

The main advantage of trading using opposite AmTrust Financial and HUNTINGTON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, HUNTINGTON 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 HUNTINGTON will offset losses from the drop in HUNTINGTON's long position.
The idea behind AmTrust Financial Services and HUNTINGTON BANCSHARES INC 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.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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