Correlation Between Employers Holdings and Asure Software
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Asure Software 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 Employers Holdings and Asure Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Asure Software, you can compare the effects of market volatilities on Employers Holdings and Asure Software 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 Employers Holdings with a short position of Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Asure Software.
Diversification Opportunities for Employers Holdings and Asure Software
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Employers and Asure is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Employers Holdings 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 Employers Holdings are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Employers Holdings i.e., Employers Holdings and Asure Software go up and down completely randomly.
Pair Corralation between Employers Holdings and Asure Software
Considering the 90-day investment horizon Employers Holdings is expected to generate 0.49 times more return on investment than Asure Software. However, Employers Holdings is 2.04 times less risky than Asure Software. It trades about 0.1 of its potential returns per unit of risk. Asure Software is currently generating about 0.03 per unit of risk. If you would invest 4,068 in Employers Holdings on August 28, 2024 and sell it today you would earn a total of 1,262 from holding Employers Holdings or generate 31.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Employers Holdings vs. Asure Software
Performance |
| Timeline |
| Employers Holdings |
| Asure Software |
Employers Holdings and Asure Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Asure Software
The main advantage of trading using opposite Employers Holdings and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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