Correlation Between TWFG, and Arthur J

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

By analyzing existing cross correlation between TWFG, Class A and Arthur J Gallagher, you can compare the effects of market volatilities on TWFG, and Arthur J 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 TWFG, with a short position of Arthur J. Check out your portfolio center. Please also check ongoing floating volatility patterns of TWFG, and Arthur J.

Diversification Opportunities for TWFG, and Arthur J

0.68

Correlation Coefficient

TWFG,  Arthur J

Poor diversification

The 3 months correlation between TWFG, and Arthur is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding TWFG, Class A and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher and TWFG, 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 TWFG, Class A are associated (or correlated) with Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of TWFG, i.e., TWFG, and Arthur J go up and down completely randomly.

Pair Corralation between TWFG, and Arthur J

Given the investment horizon of 90 days TWFG, Class A is expected to under-perform the Arthur J. In addition to that, TWFG, is 2.12 times more volatile than Arthur J Gallagher. It trades about -0.23 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about -0.37 per unit of volatility. If you would invest  30,298  in Arthur J Gallagher on October 6, 2024 and sell it today you would lose (2,709) from holding Arthur J Gallagher or give up 8.94% of portfolio value over 90 days.

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

TWFG, Class A  vs.  Arthur J Gallagher

TWFG, Class A

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, TWFG, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Arthur J Gallagher

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arthur J Gallagher has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Arthur J is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TWFG, and Arthur J

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

The idea behind TWFG, Class A and Arthur J Gallagher 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.