Arch Capital Return On Equity vs. Return On Asset
| RSK Stock | EUR 89.60 2.65 3.05% |
For Arch Capital profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Arch Capital to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Arch Capital Group utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Arch Capital's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Arch Capital Group over time as well as its relative position and ranking within its peers.
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Arch Capital Group Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Arch Capital's current stock value. Our valuation model uses many indicators to compare Arch Capital value to that of its competitors to determine the firm's financial worth. Arch Capital Group is rated third in return on equity category among its peers. It also is rated third in return on asset category among its peers reporting about 0.18 of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Arch Capital Group is roughly 5.49 . The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Arch Capital's earnings, one of the primary drivers of an investment's value.Arch Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
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| = | 0.11 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
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| = | 0.0204 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Arch Return On Asset Comparison
Arch Capital is rated second in return on asset category among its peers.
Arch Capital Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Arch Capital, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Arch Capital will eventually generate negative long term returns. The profitability progress is the general direction of Arch Capital's change in net profit over the period of time. It can combine multiple indicators of Arch Capital, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Arch Capital Group Ltd., together with its subsidiaries, provides property, casualty, and mortgage insurance and reinsurance products worldwide. The company was founded in 1995 and is based in Pembroke, Bermuda. ARCH CAPITAL operates under Insurance - Diversified classification in Germany and is traded on Frankfurt Stock Exchange. It employs 3642 people.
Arch Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Arch Capital. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Arch Capital position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Arch Capital's important profitability drivers and their relationship over time.
Use Arch Capital in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Arch Capital position performs unexpectedly, the other equity 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 Arch Capital will appreciate offsetting losses from the drop in the long position's value.Arch Capital Pair Trading
Arch Capital Group Pair Trading Analysis
The ability to find closely correlated positions to Arch Capital could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Arch Capital when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Arch Capital - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Arch Capital Group to buy it.
The correlation of Arch Capital is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Arch Capital moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Arch Capital Group moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Arch Capital can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Arch Capital position
In addition to having Arch Capital in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Insurance Thematic Idea Now
Insurance
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Insurance theme has 61 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Insurance Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in Arch Stock
When determining whether Arch Capital Group is a strong investment it is important to analyze Arch Capital's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Arch Capital's future performance. For an informed investment choice regarding Arch Stock, refer to the following important reports:Check out Your Equity Center. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
To fully project Arch Capital's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Arch Capital Group at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Arch Capital's income statement, its balance sheet, and the statement of cash flows.