Correlation Between Employers Holdings and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Capital Clean 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 Capital Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Capital Clean Energy, you can compare the effects of market volatilities on Employers Holdings and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Capital Clean.
Diversification Opportunities for Employers Holdings and Capital Clean
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Employers and Capital is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Employers Holdings i.e., Employers Holdings and Capital Clean go up and down completely randomly.
Pair Corralation between Employers Holdings and Capital Clean
Considering the 90-day investment horizon Employers Holdings is expected to generate 0.76 times more return on investment than Capital Clean. However, Employers Holdings is 1.32 times less risky than Capital Clean. It trades about 0.1 of its potential returns per unit of risk. Capital Clean Energy is currently generating about 0.06 per unit of risk. If you would invest 4,833 in Employers Holdings on September 3, 2024 and sell it today you would earn a total of 503.00 from holding Employers Holdings or generate 10.41% 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. Capital Clean Energy
Performance |
| Timeline |
| Employers Holdings |
| Capital Clean Energy |
Employers Holdings and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Capital Clean
The main advantage of trading using opposite Employers Holdings and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| Capital Clean vs. Electrovaya Common Shares | Capital Clean vs. Zoom Video Communications | Capital Clean vs. Videolocity International | Capital Clean vs. Hurco Companies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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