Correlation Between Employers Holdings and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Grupo Simec 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 Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Grupo Simec SAB, you can compare the effects of market volatilities on Employers Holdings and Grupo Simec 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 Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Grupo Simec.
Diversification Opportunities for Employers Holdings and Grupo Simec
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Employers and Grupo is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB 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 Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of Employers Holdings i.e., Employers Holdings and Grupo Simec go up and down completely randomly.
Pair Corralation between Employers Holdings and Grupo Simec
Considering the 90-day investment horizon Employers Holdings is expected to generate 0.67 times more return on investment than Grupo Simec. However, Employers Holdings is 1.49 times less risky than Grupo Simec. It trades about 0.21 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.06 per unit of risk. If you would invest 4,825 in Employers Holdings on August 25, 2024 and sell it today you would earn a total of 500.00 from holding Employers Holdings or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Employers Holdings vs. Grupo Simec SAB
Performance |
| Timeline |
| Employers Holdings |
| Grupo Simec SAB |
Employers Holdings and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Grupo Simec
The main advantage of trading using opposite Employers Holdings and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec's long position.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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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