Correlation Between AXIS Capital and Employers Holdings
Can any of the company-specific risk be diversified away by investing in both AXIS Capital and Employers Holdings 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 AXIS Capital and Employers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXIS Capital Holdings and Employers Holdings, you can compare the effects of market volatilities on AXIS Capital and Employers Holdings 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 AXIS Capital with a short position of Employers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXIS Capital and Employers Holdings.
Diversification Opportunities for AXIS Capital and Employers Holdings
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AXIS and Employers is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding AXIS Capital Holdings and Employers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Employers Holdings and AXIS Capital 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 AXIS Capital Holdings are associated (or correlated) with Employers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Employers Holdings has no effect on the direction of AXIS Capital i.e., AXIS Capital and Employers Holdings go up and down completely randomly.
Pair Corralation between AXIS Capital and Employers Holdings
Considering the 90-day investment horizon AXIS Capital Holdings is expected to generate 1.06 times more return on investment than Employers Holdings. However, AXIS Capital is 1.06 times more volatile than Employers Holdings. It trades about 0.16 of its potential returns per unit of risk. Employers Holdings is currently generating about 0.08 per unit of risk. If you would invest 5,299 in AXIS Capital Holdings on November 9, 2024 and sell it today you would earn a total of 4,120 from holding AXIS Capital Holdings or generate 77.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXIS Capital Holdings vs. Employers Holdings
Performance |
| Timeline |
| AXIS Capital Holdings |
| Employers Holdings |
AXIS Capital and Employers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXIS Capital and Employers Holdings
The main advantage of trading using opposite AXIS Capital and Employers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXIS Capital position performs unexpectedly, Employers Holdings 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 Employers Holdings will offset losses from the drop in Employers Holdings' long position.| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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