Correlation Between Employers Holdings and PJT Partners
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and PJT Partners 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 PJT Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and PJT Partners, you can compare the effects of market volatilities on Employers Holdings and PJT Partners 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 PJT Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and PJT Partners.
Diversification Opportunities for Employers Holdings and PJT Partners
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Employers and PJT is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and PJT Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJT Partners 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 PJT Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJT Partners has no effect on the direction of Employers Holdings i.e., Employers Holdings and PJT Partners go up and down completely randomly.
Pair Corralation between Employers Holdings and PJT Partners
Considering the 90-day investment horizon Employers Holdings is expected to generate 1.5 times less return on investment than PJT Partners. But when comparing it to its historical volatility, Employers Holdings is 1.59 times less risky than PJT Partners. It trades about 0.25 of its potential returns per unit of risk. PJT Partners is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 13,867 in PJT Partners on August 30, 2024 and sell it today you would earn a total of 2,652 from holding PJT Partners or generate 19.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Employers Holdings vs. PJT Partners
Performance |
| Timeline |
| Employers Holdings |
| PJT Partners |
Employers Holdings and PJT Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and PJT Partners
The main advantage of trading using opposite Employers Holdings and PJT Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, PJT Partners 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 PJT Partners will offset losses from the drop in PJT Partners' long position.| Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title | Employers Holdings vs. Essent Group |
| PJT Partners vs. Scully Royalty | PJT Partners vs. Piper Sandler Companies | PJT Partners vs. Evercore Partners | PJT Partners vs. Moelis Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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