Correlation Between Employers Holdings and Trisura Group
Can any of the company-specific risk be diversified away by investing in both Employers Holdings and Trisura Group 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 Trisura Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Trisura Group, you can compare the effects of market volatilities on Employers Holdings and Trisura Group 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 Trisura Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Trisura Group.
Diversification Opportunities for Employers Holdings and Trisura Group
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Employers and Trisura is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group 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 Trisura Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of Employers Holdings i.e., Employers Holdings and Trisura Group go up and down completely randomly.
Pair Corralation between Employers Holdings and Trisura Group
Considering the 90-day investment horizon Employers Holdings is expected to generate 0.75 times more return on investment than Trisura Group. However, Employers Holdings is 1.32 times less risky than Trisura Group. It trades about 0.12 of its potential returns per unit of risk. Trisura Group is currently generating about -0.04 per unit of risk. If you would invest 4,219 in Employers Holdings on September 3, 2024 and sell it today you would earn a total of 1,117 from holding Employers Holdings or generate 26.48% 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. Trisura Group
Performance |
| Timeline |
| Employers Holdings |
| Trisura Group |
Employers Holdings and Trisura Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Trisura Group
The main advantage of trading using opposite Employers Holdings and Trisura Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Trisura Group 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 Trisura Group will offset losses from the drop in Trisura Group's long position.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| Trisura Group vs. Western Asset Global | Trisura Group vs. Invesco Trust For | Trisura Group vs. Logan Ridge Finance | Trisura Group vs. Invesco Advantage MIT |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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