Correlation Between NBCUNIVERSAL and AmTrust Financial

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

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

Diversification Opportunities for NBCUNIVERSAL and AmTrust Financial

-0.5

Correlation Coefficient

NBCUNIVERSAL  AmTrust Financial

Very good diversification

The 3 months correlation between NBCUNIVERSAL and AmTrust is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding NBCUNIVERSAL MEDIA LLC and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL i.e., NBCUNIVERSAL and AmTrust Financial go up and down completely randomly.

Pair Corralation between NBCUNIVERSAL and AmTrust Financial

Assuming the 90 days trading horizon NBCUNIVERSAL MEDIA LLC is expected to under-perform the AmTrust Financial. But the bond apears to be less risky and, when comparing its historical volatility, NBCUNIVERSAL MEDIA LLC is 1.22 times less risky than AmTrust Financial. The bond trades about -0.31 of its potential returns per unit of risk. The AmTrust Financial Services is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,460  in AmTrust Financial Services on September 29, 2024 and sell it today you would lose (55.00) from holding AmTrust Financial Services or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.0%
Values	Daily Returns

NBCUNIVERSAL MEDIA LLC  vs.  AmTrust Financial Services

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NBCUNIVERSAL MEDIA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NBCUNIVERSAL MEDIA LLC investors.

AmTrust Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AmTrust Financial Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, AmTrust Financial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with NBCUNIVERSAL and AmTrust Financial

The main advantage of trading using opposite NBCUNIVERSAL and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.