Correlation Between Abacus Life and Arthur J

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

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

Diversification Opportunities for Abacus Life and Arthur J

-0.38

Correlation Coefficient

Abacus Life  Arthur J

Very good diversification

The 3 months correlation between Abacus and Arthur is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life 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 Abacus Life 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 Abacus Life 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 Abacus Life i.e., Abacus Life and Arthur J go up and down completely randomly.

Pair Corralation between Abacus Life and Arthur J

Considering the 90-day investment horizon Abacus Life is expected to under-perform the Arthur J. In addition to that, Abacus Life is 2.63 times more volatile than Arthur J Gallagher. It trades about -0.14 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about 0.05 per unit of volatility. If you would invest  27,890  in Arthur J Gallagher on September 27, 2024 and sell it today you would earn a total of  945.00  from holding Arthur J Gallagher or generate 3.39% return on investment over 90 days.

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

Abacus Life  vs.  Arthur J Gallagher

Abacus Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abacus Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Arthur J Gallagher

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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 Abacus Life and Arthur J

The main advantage of trading using opposite Abacus Life and Arthur J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abacus Life 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 Abacus Life 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.