Correlation Between AmTrust Financial and WEBUY GLOBAL

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

Diversification Opportunities for AmTrust Financial and WEBUY GLOBAL

-0.06

Correlation Coefficient

AmTrust Financial  WEBUY GLOBAL

Good diversification

The 3 months correlation between AmTrust and WEBUY is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and WEBUY GLOBAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBUY GLOBAL LTD 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 WEBUY GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBUY GLOBAL LTD has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and WEBUY GLOBAL go up and down completely randomly.

Pair Corralation between AmTrust Financial and WEBUY GLOBAL

Assuming the 90 days horizon AmTrust Financial Services is expected to generate 0.09 times more return on investment than WEBUY GLOBAL. However, AmTrust Financial Services is 11.24 times less risky than WEBUY GLOBAL. It trades about 0.06 of its potential returns per unit of risk. WEBUY GLOBAL LTD is currently generating about -0.01 per unit of risk. If you would invest  1,350  in AmTrust Financial Services on December 21, 2024 and sell it today you would earn a total of  75.00  from holding AmTrust Financial Services or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

AmTrust Financial Services  vs.  WEBUY GLOBAL LTD

AmTrust Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AmTrust Financial Services are ranked lower than 4 (%) 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 April 2025.

WEBUY GLOBAL LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days WEBUY GLOBAL LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with AmTrust Financial and WEBUY GLOBAL

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

The idea behind AmTrust Financial Services and WEBUY GLOBAL LTD 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.