Correlation Between Dorman Products and AMERISAFE

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

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

Diversification Opportunities for Dorman Products and AMERISAFE

0.0

Correlation Coefficient

Dorman Products  AMERISAFE

Pay attention - limited upside

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

Pair Corralation between Dorman Products and AMERISAFE

Given the investment horizon of 90 days Dorman Products is expected to generate 1.13 times more return on investment than AMERISAFE. However, Dorman Products is 1.13 times more volatile than AMERISAFE. It trades about 0.04 of its potential returns per unit of risk. AMERISAFE is currently generating about -0.05 per unit of risk. If you would invest  11,495  in Dorman Products on May 3, 2025 and sell it today you would earn a total of  418.00  from holding Dorman Products or generate 3.64% return on investment over 90 days.

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

Dorman Products  vs.  AMERISAFE

Dorman Products

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dorman Products are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Dorman Products is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

AMERISAFE

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMERISAFE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AMERISAFE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dorman Products and AMERISAFE

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

The idea behind Dorman Products and AMERISAFE 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.