Correlation Between Employers Holdings and ICC Holdings
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and ICC 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 Employers Holdings and ICC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and ICC Holdings, you can compare the effects of market volatilities on Employers Holdings and ICC 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 Employers Holdings with a short position of ICC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and ICC Holdings.
Diversification Opportunities for Employers Holdings and ICC Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Employers and ICC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Employers Holdings i.e., Employers Holdings and ICC Holdings go up and down completely randomly.
Pair Corralation between Employers Holdings and ICC Holdings
Considering the 90-day investment horizon Employers Holdings is expected to generate 36.79 times less return on investment than ICC Holdings. But when comparing it to its historical volatility, Employers Holdings is 64.55 times less risky than ICC Holdings. It trades about 0.15 of its potential returns per unit of risk. ICC Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,590 in ICC Holdings on August 24, 2024 and sell it today you would earn a total of 717.01 from holding ICC Holdings or generate 45.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.2% |
| Values | Daily Returns |
Employers Holdings vs. ICC Holdings
Performance |
| Timeline |
| Employers Holdings |
| ICC Holdings |
Employers Holdings and ICC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and ICC Holdings
The main advantage of trading using opposite Employers Holdings and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, ICC 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 ICC Holdings will offset losses from the drop in ICC Holdings' long position.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| ICC Holdings vs. Employers Holdings | ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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