Correlation Between Employers Holdings and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Solstad Offshore 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 Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Solstad Offshore ASA, you can compare the effects of market volatilities on Employers Holdings and Solstad Offshore 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 Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Solstad Offshore.
Diversification Opportunities for Employers Holdings and Solstad Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Employers and Solstad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA 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 Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Employers Holdings i.e., Employers Holdings and Solstad Offshore go up and down completely randomly.
Pair Corralation between Employers Holdings and Solstad Offshore
Considering the 90-day investment horizon Employers Holdings is expected to generate 3.07 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Employers Holdings is 3.44 times less risky than Solstad Offshore. It trades about 0.05 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Solstad Offshore ASA on August 31, 2024 and sell it today you would earn a total of 158.00 from holding Solstad Offshore ASA or generate 104.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Employers Holdings vs. Solstad Offshore ASA
Performance |
| Timeline |
| Employers Holdings |
| Solstad Offshore ASA |
Employers Holdings and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Solstad Offshore
The main advantage of trading using opposite Employers Holdings and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| Solstad Offshore vs. ON Semiconductor | Solstad Offshore vs. Uranium Energy Corp | Solstad Offshore vs. Arm Holdings plc | Solstad Offshore vs. Aerofoam Metals |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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