Correlation Between Hallmark Financial and American Financial

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

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

Diversification Opportunities for Hallmark Financial and American Financial

0.0

Correlation Coefficient

Hallmark Financial  American Financial

Pay attention - limited upside

The 3 months correlation between Hallmark and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hallmark Financial Services and American Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Financial and Hallmark Financial 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 Hallmark Financial Services are associated (or correlated) with American Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Financial has no effect on the direction of Hallmark Financial i.e., Hallmark Financial and American Financial go up and down completely randomly.

Pair Corralation between Hallmark Financial and American Financial

If you would invest  69.00  in Hallmark Financial Services on January 31, 2024 and sell it today you would earn a total of  0.00  from holding Hallmark Financial Services or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Hallmark Financial Services  vs.  American Financial Group

Hallmark Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hallmark Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Hallmark Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

American Financial

Risk-Adjusted Performance

10 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Financial Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, American Financial may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Hallmark Financial and American Financial

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

The idea behind Hallmark Financial Services and American Financial Group 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..