Correlation Between Erie Indemnity and AMERISAFE
Can any of the company-specific risk be diversified away by investing in both Erie Indemnity and AMERISAFE 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 Erie Indemnity and AMERISAFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erie Indemnity and AMERISAFE, you can compare the effects of market volatilities on Erie Indemnity and AMERISAFE 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 Erie Indemnity with a short position of AMERISAFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erie Indemnity and AMERISAFE.
Diversification Opportunities for Erie Indemnity and AMERISAFE
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Erie and AMERISAFE is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Erie Indemnity and AMERISAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERISAFE and Erie Indemnity 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 Erie Indemnity are associated (or correlated) with AMERISAFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERISAFE has no effect on the direction of Erie Indemnity i.e., Erie Indemnity and AMERISAFE go up and down completely randomly.
Pair Corralation between Erie Indemnity and AMERISAFE
Given the investment horizon of 90 days Erie Indemnity is expected to under-perform the AMERISAFE. In addition to that, Erie Indemnity is 1.21 times more volatile than AMERISAFE. It trades about -0.04 of its total potential returns per unit of risk. AMERISAFE is currently generating about 0.18 per unit of volatility. If you would invest 5,473 in AMERISAFE on August 31, 2024 and sell it today you would earn a total of 402.00 from holding AMERISAFE or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erie Indemnity vs. AMERISAFE
Performance |
| Timeline |
| Erie Indemnity |
| AMERISAFE |
Erie Indemnity and AMERISAFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erie Indemnity and AMERISAFE
The main advantage of trading using opposite Erie Indemnity and AMERISAFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erie Indemnity position performs unexpectedly, AMERISAFE 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 AMERISAFE will offset losses from the drop in AMERISAFE's long position.| Erie Indemnity vs. CorVel Corp | Erie Indemnity vs. Huize Holding | Erie Indemnity vs. Crawford Company | Erie Indemnity vs. eHealth |
| AMERISAFE vs. Assured Guaranty | AMERISAFE vs. MBIA Inc | AMERISAFE vs. Enact Holdings | AMERISAFE vs. ICC Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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