Correlation Between Huize Holding and Erie Indemnity
Can any of the company-specific risk be diversified away by investing in both Huize Holding and Erie Indemnity 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 Huize Holding and Erie Indemnity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huize Holding and Erie Indemnity, you can compare the effects of market volatilities on Huize Holding and Erie Indemnity 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 Huize Holding with a short position of Erie Indemnity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huize Holding and Erie Indemnity.
Diversification Opportunities for Huize Holding and Erie Indemnity
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Huize and Erie is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Huize Holding and Erie Indemnity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erie Indemnity and Huize Holding 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 Huize Holding are associated (or correlated) with Erie Indemnity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erie Indemnity has no effect on the direction of Huize Holding i.e., Huize Holding and Erie Indemnity go up and down completely randomly.
Pair Corralation between Huize Holding and Erie Indemnity
Given the investment horizon of 90 days Huize Holding is expected to under-perform the Erie Indemnity. In addition to that, Huize Holding is 1.77 times more volatile than Erie Indemnity. It trades about -0.32 of its total potential returns per unit of risk. Erie Indemnity is currently generating about -0.08 per unit of volatility. If you would invest 45,036 in Erie Indemnity on August 28, 2024 and sell it today you would lose (1,906) from holding Erie Indemnity or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huize Holding vs. Erie Indemnity
Performance |
| Timeline |
| Huize Holding |
| Erie Indemnity |
Huize Holding and Erie Indemnity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huize Holding and Erie Indemnity
The main advantage of trading using opposite Huize Holding and Erie Indemnity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huize Holding position performs unexpectedly, Erie Indemnity 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 Erie Indemnity will offset losses from the drop in Erie Indemnity's long position.| Huize Holding vs. CorVel Corp | Huize Holding vs. Erie Indemnity | Huize Holding vs. Crawford Company | Huize Holding vs. eHealth |
| Erie Indemnity vs. CorVel Corp | Erie Indemnity vs. eHealth | Erie Indemnity vs. Aquagold International | Erie Indemnity vs. Morningstar Unconstrained Allocation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |