Correlation Between Calissio Resources and AmTrust Financial

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

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

Diversification Opportunities for Calissio Resources and AmTrust Financial

0.1

Correlation Coefficient

Calissio Resources  AmTrust Financial

Average diversification

The 3 months correlation between Calissio and AmTrust is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Calissio Resources Group and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and Calissio Resources 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 Calissio Resources Group are associated (or correlated) with AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of Calissio Resources i.e., Calissio Resources and AmTrust Financial go up and down completely randomly.

Pair Corralation between Calissio Resources and AmTrust Financial

Given the investment horizon of 90 days Calissio Resources Group is expected to generate 14.78 times more return on investment than AmTrust Financial. However, Calissio Resources is 14.78 times more volatile than AmTrust Financial Services. It trades about 0.09 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.08 per unit of risk. If you would invest  0.04  in Calissio Resources Group on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Calissio Resources Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Calissio Resources Group  vs.  AmTrust Financial Services

Calissio Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calissio Resources Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Calissio Resources reported solid returns over the last few months and may actually be approaching a breakup point.

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 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, AmTrust Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calissio Resources and AmTrust Financial

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

The idea behind Calissio Resources Group and AmTrust Financial Services 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.