Correlation Between Global Diamond and Employers Holdings
Can any of the company-specific risk be diversified away by investing in both Global Diamond and Employers Holdings 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 Global Diamond and Employers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Diamond Exchange and Employers Holdings, you can compare the effects of market volatilities on Global Diamond and Employers Holdings 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 Global Diamond with a short position of Employers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Diamond and Employers Holdings.
Diversification Opportunities for Global Diamond and Employers Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Employers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Diamond Exchange and Employers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Employers Holdings and Global Diamond 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 Global Diamond Exchange are associated (or correlated) with Employers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Employers Holdings has no effect on the direction of Global Diamond i.e., Global Diamond and Employers Holdings go up and down completely randomly.
Pair Corralation between Global Diamond and Employers Holdings
If you would invest 3,886 in Employers Holdings on November 30, 2024 and sell it today you would earn a total of 1,294 from holding Employers Holdings or generate 33.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Diamond Exchange vs. Employers Holdings
Performance |
| Timeline |
| Global Diamond Exchange |
| Employers Holdings |
Global Diamond and Employers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Diamond and Employers Holdings
The main advantage of trading using opposite Global Diamond and Employers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Diamond position performs unexpectedly, Employers Holdings 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 Employers Holdings will offset losses from the drop in Employers Holdings' long position.| Global Diamond vs. Radcom | Global Diamond vs. Analog Devices | Global Diamond vs. Paysafe | Global Diamond vs. 51Talk Online Education |
| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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