Correlation Between Hagerty and First Acceptance

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

By analyzing existing cross correlation between Hagerty and First Acceptance Corp, you can compare the effects of market volatilities on Hagerty and First Acceptance 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 Hagerty with a short position of First Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hagerty and First Acceptance.

Diversification Opportunities for Hagerty and First Acceptance

-0.44

Correlation Coefficient

Hagerty  First Acceptance

Very good diversification

The 3 months correlation between Hagerty and First is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hagerty and First Acceptance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Acceptance Corp and Hagerty 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 Hagerty are associated (or correlated) with First Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Acceptance Corp has no effect on the direction of Hagerty i.e., Hagerty and First Acceptance go up and down completely randomly.

Pair Corralation between Hagerty and First Acceptance

If you would invest  1,109  in Hagerty on September 13, 2024 and sell it today you would earn a total of  12.00  from holding Hagerty or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Hagerty  vs.  First Acceptance Corp

Hagerty

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hagerty are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Hagerty is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

First Acceptance Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hagerty and First Acceptance

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

The idea behind Hagerty and First Acceptance Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.