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

-0.4

Correlation Coefficient

EMPLOYERS HLDGS  Mapfre SA

Very good diversification

The 3 months correlation between EMPLOYERS and Mapfre is -0.4. 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 under-perform the Mapfre SA. But the stock apears to be less risky and, when comparing its historical volatility, EMPLOYERS HLDGS DL is 1.41 times less risky than Mapfre SA. The stock trades about -0.06 of its potential returns per unit of risk. The Mapfre SA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  283.00  in Mapfre SA on April 23, 2025 and sell it today you would earn a total of  59.00  from holding Mapfre SA or generate 20.85% return on investment over 90 days.

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

EMPLOYERS HLDGS DL  vs.  Mapfre SA

EMPLOYERS HLDGS DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMPLOYERS HLDGS DL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EMPLOYERS HLDGS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mapfre SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mapfre SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mapfre SA reported solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind EMPLOYERS HLDGS DL and Mapfre SA 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.