Correlation Between EMPLOYERS HLDGS and Mapfre SA
Can any of the company-specific risk be diversified away by investing in both EMPLOYERS HLDGS and Mapfre SA 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 HLDGS and Mapfre SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMPLOYERS HLDGS DL and Mapfre SA, you can compare the effects of market volatilities on EMPLOYERS HLDGS and Mapfre SA 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 HLDGS with a short position of Mapfre SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMPLOYERS HLDGS and Mapfre SA.
Diversification Opportunities for EMPLOYERS HLDGS and Mapfre SA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMPLOYERS and Mapfre is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding EMPLOYERS HLDGS DL and Mapfre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre SA and EMPLOYERS HLDGS 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 HLDGS DL are associated (or correlated) with Mapfre SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre SA has no effect on the direction of EMPLOYERS HLDGS i.e., EMPLOYERS HLDGS and Mapfre SA go up and down completely randomly.
Pair Corralation between EMPLOYERS HLDGS and Mapfre SA
Assuming the 90 days horizon EMPLOYERS HLDGS DL is expected to generate 0.85 times more return on investment than Mapfre SA. However, EMPLOYERS HLDGS DL is 1.17 times less risky than Mapfre SA. It trades about 0.11 of its potential returns per unit of risk. Mapfre SA is currently generating about 0.09 per unit of risk. If you would invest 3,366 in EMPLOYERS HLDGS DL on September 14, 2024 and sell it today you would earn a total of 1,574 from holding EMPLOYERS HLDGS DL or generate 46.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMPLOYERS HLDGS DL vs. Mapfre SA
Performance |
| Timeline |
| EMPLOYERS HLDGS DL |
| Mapfre SA |
EMPLOYERS HLDGS and Mapfre SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMPLOYERS HLDGS and Mapfre SA
The main advantage of trading using opposite EMPLOYERS HLDGS and Mapfre SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMPLOYERS HLDGS position performs unexpectedly, Mapfre SA 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 Mapfre SA will offset losses from the drop in Mapfre SA's long position.| EMPLOYERS HLDGS vs. Flutter Entertainment PLC | EMPLOYERS HLDGS vs. XLMedia PLC | EMPLOYERS HLDGS vs. TOWNSQUARE MEDIA INC | EMPLOYERS HLDGS vs. TRADEDOUBLER AB SK |
| Mapfre SA vs. First American Financial | Mapfre SA vs. MGIC Investment | Mapfre SA vs. Lancashire Holdings Limited | Mapfre SA vs. Trisura Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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