Correlation Between Employers Holdings and Summit Environmental
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Summit Environmental 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 Summit Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Summit Environmental, you can compare the effects of market volatilities on Employers Holdings and Summit Environmental 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 Summit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Summit Environmental.
Diversification Opportunities for Employers Holdings and Summit Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Employers and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Summit Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Environmental 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 Summit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Environmental has no effect on the direction of Employers Holdings i.e., Employers Holdings and Summit Environmental go up and down completely randomly.
Pair Corralation between Employers Holdings and Summit Environmental
If you would invest 4,028 in Employers Holdings on November 28, 2024 and sell it today you would earn a total of 1,027 from holding Employers Holdings or generate 25.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Employers Holdings vs. Summit Environmental
Performance |
| Timeline |
| Employers Holdings |
| Summit Environmental |
Employers Holdings and Summit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Summit Environmental
The main advantage of trading using opposite Employers Holdings and Summit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Summit Environmental 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 Summit Environmental will offset losses from the drop in Summit Environmental's long position.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| Summit Environmental vs. ArcelorMittal SA ADR | Summit Environmental vs. United States Steel | Summit Environmental vs. POSCO Holdings | Summit Environmental vs. Titan International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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