Correlation Between Employers Holdings and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Maiden 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 Maiden 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 Maiden Holdings, you can compare the effects of market volatilities on Employers Holdings and Maiden 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 Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Maiden Holdings.
Diversification Opportunities for Employers Holdings and Maiden Holdings
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Employers and Maiden is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Employers Holdings i.e., Employers Holdings and Maiden Holdings go up and down completely randomly.
Pair Corralation between Employers Holdings and Maiden Holdings
Considering the 90-day investment horizon Employers Holdings is expected to generate 1.36 times less return on investment than Maiden Holdings. But when comparing it to its historical volatility, Employers Holdings is 1.85 times less risky than Maiden Holdings. It trades about 0.04 of its potential returns per unit of risk. Maiden Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,339 in Maiden Holdings on August 27, 2024 and sell it today you would earn a total of 354.00 from holding Maiden Holdings or generate 26.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Employers Holdings vs. Maiden Holdings
Performance |
| Timeline |
| Employers Holdings |
| Maiden Holdings |
Employers Holdings and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Maiden Holdings
The main advantage of trading using opposite Employers Holdings and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Maiden 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |