Correlation Between Employers Holdings and Latamgrowth SPAC

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

By analyzing existing cross correlation between Employers Holdings and Latamgrowth SPAC Unit, you can compare the effects of market volatilities on Employers Holdings and Latamgrowth SPAC 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 Holdings with a short position of Latamgrowth SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Latamgrowth SPAC.

Diversification Opportunities for Employers Holdings and Latamgrowth SPAC

-0.1

Correlation Coefficient

Employers Holdings  Latamgrowth SPAC

Good diversification

The 3 months correlation between Employers and Latamgrowth is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Latamgrowth SPAC Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latamgrowth SPAC Unit and Employers Holdings 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 Holdings are associated (or correlated) with Latamgrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latamgrowth SPAC Unit has no effect on the direction of Employers Holdings i.e., Employers Holdings and Latamgrowth SPAC go up and down completely randomly.

Pair Corralation between Employers Holdings and Latamgrowth SPAC

Considering the 90-day investment horizon Employers Holdings is expected to generate 0.92 times more return on investment than Latamgrowth SPAC. However, Employers Holdings is 1.08 times less risky than Latamgrowth SPAC. It trades about 0.11 of its potential returns per unit of risk. Latamgrowth SPAC Unit is currently generating about 0.02 per unit of risk. If you would invest  4,777  in Employers Holdings on September 17, 2024 and sell it today you would earn a total of  495.00  from holding Employers Holdings or generate 10.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Employers Holdings  vs.  Latamgrowth SPAC Unit

Employers Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Employers Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Employers Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Latamgrowth SPAC Unit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Latamgrowth SPAC Unit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Latamgrowth SPAC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Employers Holdings and Latamgrowth SPAC

The main advantage of trading using opposite Employers Holdings and Latamgrowth SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings position performs unexpectedly, Latamgrowth SPAC 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 Latamgrowth SPAC will offset losses from the drop in Latamgrowth SPAC's long position.

The idea behind Employers Holdings and Latamgrowth SPAC Unit 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.