Correlation Between Positive Physicians and Assured Guaranty

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

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

Diversification Opportunities for Positive Physicians and Assured Guaranty

0.0

Correlation Coefficient

Positive Physicians  Assured Guaranty

Pay attention - limited upside

The 3 months correlation between Positive and Assured is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Positive Physicians Holdings and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty and Positive Physicians 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 Positive Physicians Holdings are associated (or correlated) with Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of Positive Physicians i.e., Positive Physicians and Assured Guaranty go up and down completely randomly.

Pair Corralation between Positive Physicians and Assured Guaranty

If you would invest  8,902  in Assured Guaranty on December 29, 2024 and sell it today you would lose (20.00) from holding Assured Guaranty or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Positive Physicians Holdings  vs.  Assured Guaranty

Positive Physicians

Risk-Adjusted Performance

Very Weak

Over the last 90 days Positive Physicians Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Positive Physicians is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Assured Guaranty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assured Guaranty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Assured Guaranty is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Positive Physicians and Assured Guaranty

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

The idea behind Positive Physicians Holdings and Assured Guaranty 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.