Correlation Between AMERISAFE and Horace Mann

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

By analyzing existing cross correlation between AMERISAFE and Horace Mann Educators, you can compare the effects of market volatilities on AMERISAFE and Horace Mann 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 Horace Mann. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERISAFE and Horace Mann.

Diversification Opportunities for AMERISAFE and Horace Mann

0.92

Correlation Coefficient

AMERISAFE  Horace Mann

Almost no diversification

The 3 months correlation between AMERISAFE and Horace is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding AMERISAFE and Horace Mann Educators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horace Mann Educators 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 Horace Mann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horace Mann Educators has no effect on the direction of AMERISAFE i.e., AMERISAFE and Horace Mann go up and down completely randomly.

Pair Corralation between AMERISAFE and Horace Mann

Given the investment horizon of 90 days AMERISAFE is expected to generate 1.83 times less return on investment than Horace Mann. In addition to that, AMERISAFE is 1.17 times more volatile than Horace Mann Educators. It trades about 0.08 of its total potential returns per unit of risk. Horace Mann Educators is currently generating about 0.18 per unit of volatility. If you would invest  3,413  in Horace Mann Educators on September 15, 2024 and sell it today you would earn a total of  733.00  from holding Horace Mann Educators or generate 21.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

AMERISAFE  vs.  Horace Mann Educators

AMERISAFE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AMERISAFE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, AMERISAFE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Horace Mann Educators

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Horace Mann Educators are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Horace Mann displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMERISAFE and Horace Mann

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

The idea behind AMERISAFE and Horace Mann Educators 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..