Correlation Between Conifer Holdings, and Bowhead Specialty

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

By analyzing existing cross correlation between Conifer Holdings, 975 and Bowhead Specialty Holdings, you can compare the effects of market volatilities on Conifer Holdings, and Bowhead Specialty 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 Conifer Holdings, with a short position of Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifer Holdings, and Bowhead Specialty.

Diversification Opportunities for Conifer Holdings, and Bowhead Specialty

-0.31

Correlation Coefficient

Conifer Holdings,  Bowhead Specialty

Very good diversification

The 3 months correlation between Conifer and Bowhead is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Conifer Holdings, 975 and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty and Conifer Holdings, 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 Conifer Holdings, 975 are associated (or correlated) with Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of Conifer Holdings, i.e., Conifer Holdings, and Bowhead Specialty go up and down completely randomly.

Pair Corralation between Conifer Holdings, and Bowhead Specialty

Assuming the 90 days horizon Conifer Holdings, is expected to generate 1.53 times less return on investment than Bowhead Specialty. In addition to that, Conifer Holdings, is 1.34 times more volatile than Bowhead Specialty Holdings. It trades about 0.05 of its total potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about 0.11 per unit of volatility. If you would invest  3,436  in Bowhead Specialty Holdings on December 21, 2024 and sell it today you would earn a total of  423.00  from holding Bowhead Specialty Holdings or generate 12.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.97%
Values	Daily Returns

Conifer Holdings, 975  vs.  Bowhead Specialty Holdings

Conifer Holdings, 975

Risk-Adjusted Performance

Insignificant

Over the last 90 days Conifer Holdings, 975 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Conifer Holdings, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bowhead Specialty

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bowhead Specialty Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Bowhead Specialty showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Conifer Holdings, and Bowhead Specialty

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

The idea behind Conifer Holdings, 975 and Bowhead Specialty Holdings 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.