Correlation Between Empire Metals and Ecclesiastical Insurance

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Can any of the company-specific risk be diversified away by investing in both Empire Metals and Ecclesiastical Insurance 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 Empire Metals and Ecclesiastical Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Metals Limited and Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Empire Metals and Ecclesiastical Insurance 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 Empire Metals with a short position of Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and Ecclesiastical Insurance.

Diversification Opportunities for Empire Metals and Ecclesiastical Insurance

EmpireEcclesiasticalDiversified AwayEmpireEcclesiasticalDiversified Away100%
0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Empire and Ecclesiastical is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance and Empire Metals 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 Empire Metals Limited are associated (or correlated) with Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Empire Metals i.e., Empire Metals and Ecclesiastical Insurance go up and down completely randomly.

Pair Corralation between Empire Metals and Ecclesiastical Insurance

Assuming the 90 days trading horizon Empire Metals Limited is expected to generate 7.21 times more return on investment than Ecclesiastical Insurance. However, Empire Metals is 7.21 times more volatile than Ecclesiastical Insurance Office. It trades about 0.09 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.03 per unit of risk. If you would invest  165.00  in Empire Metals Limited on October 31, 2024 and sell it today you would earn a total of  795.00  from holding Empire Metals Limited or generate 481.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Empire Metals Limited  vs.  Ecclesiastical Insurance Offic

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-50510
JavaScript chart by amCharts 3.21.15EEE ELLA
       Timeline  
Empire Metals Limited 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Empire Metals Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Empire Metals exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan5.566.577.588.599.510
Ecclesiastical Insurance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ecclesiastical Insurance Office has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ecclesiastical Insurance is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan127128129130131132133134135136

Empire Metals and Ecclesiastical Insurance Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.43-7.81-5.19-2.570.012.795.648.4811.32 0.10.20.30.4
JavaScript chart by amCharts 3.21.15EEE ELLA
       Returns  

Pair Trading with Empire Metals and Ecclesiastical Insurance

The main advantage of trading using opposite Empire Metals and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.
The idea behind Empire Metals Limited and Ecclesiastical Insurance Office 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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