Correlation Between 78409VBK9 and Employers Holdings

Can any of the company-specific risk be diversified away by investing in both 78409VBK9 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 78409VBK9 and Employers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPGI 29 01 MAR 32 and Employers Holdings, you can compare the effects of market volatilities on 78409VBK9 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 78409VBK9 with a short position of Employers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 78409VBK9 and Employers Holdings.

Diversification Opportunities for 78409VBK9 and Employers Holdings

-0.36

Correlation Coefficient

78409VBK9  Employers Holdings

Very good diversification

The 3 months correlation between 78409VBK9 and Employers is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SPGI 29 01 MAR 32 and Employers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Employers Holdings and 78409VBK9 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 SPGI 29 01 MAR 32 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 78409VBK9 i.e., 78409VBK9 and Employers Holdings go up and down completely randomly.

Pair Corralation between 78409VBK9 and Employers Holdings

Assuming the 90 days trading horizon SPGI 29 01 MAR 32 is expected to under-perform the Employers Holdings. But the bond apears to be less risky and, when comparing its historical volatility, SPGI 29 01 MAR 32 is 4.06 times less risky than Employers Holdings. The bond trades about -0.15 of its potential returns per unit of risk. The Employers Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,767  in Employers Holdings on September 26, 2024 and sell it today you would earn a total of  358.00  from holding Employers Holdings or generate 7.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SPGI 29 01 MAR 32  vs.  Employers Holdings

SPGI 29 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPGI 29 01 MAR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 78409VBK9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Employers Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Employers Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, Employers Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 78409VBK9 and Employers Holdings

The main advantage of trading using opposite 78409VBK9 and Employers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 78409VBK9 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.

The idea behind SPGI 29 01 MAR 32 and Employers Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.