Correlation Between Employers Holdings and Regency Centers
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Regency Centers 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 Regency Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Regency Centers, you can compare the effects of market volatilities on Employers Holdings and Regency Centers 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 Regency Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Regency Centers.
Diversification Opportunities for Employers Holdings and Regency Centers
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Employers and Regency is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers 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 Regency Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regency Centers has no effect on the direction of Employers Holdings i.e., Employers Holdings and Regency Centers go up and down completely randomly.
Pair Corralation between Employers Holdings and Regency Centers
Considering the 90-day investment horizon Employers Holdings is expected to generate 2.42 times more return on investment than Regency Centers. However, Employers Holdings is 2.42 times more volatile than Regency Centers. It trades about 0.16 of its potential returns per unit of risk. Regency Centers is currently generating about -0.12 per unit of risk. If you would invest 4,770 in Employers Holdings on August 30, 2024 and sell it today you would earn a total of 588.00 from holding Employers Holdings or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Employers Holdings vs. Regency Centers
Performance |
| Timeline |
| Employers Holdings |
| Regency Centers |
Employers Holdings and Regency Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Regency Centers
The main advantage of trading using opposite Employers Holdings and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Regency Centers 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 Regency Centers will offset losses from the drop in Regency Centers' long position.| Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title | Employers Holdings vs. Essent Group |
| Regency Centers vs. Tower One Wireless | Regency Centers vs. Employers Holdings | Regency Centers vs. Assurant | Regency Centers vs. Hooker Furniture |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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