Correlation Between Vivint Smart and Employers Holdings

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

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

Diversification Opportunities for Vivint Smart and Employers Holdings

0.0

Correlation Coefficient

Vivint Smart  Employers Holdings

Pay attention - limited upside

The 3 months correlation between Vivint and Employers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vivint Smart Home and Employers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Employers Holdings and Vivint Smart 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 Vivint Smart Home 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 Vivint Smart i.e., Vivint Smart and Employers Holdings go up and down completely randomly.

Pair Corralation between Vivint Smart and Employers Holdings

If you would invest  1,200  in Vivint Smart Home on February 5, 2024 and sell it today you would earn a total of  0.00  from holding Vivint Smart Home or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Vivint Smart Home  vs.  Employers Holdings

Vivint Smart Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivint Smart Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vivint Smart is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 weak forward indicators, Employers Holdings may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Vivint Smart and Employers Holdings

The main advantage of trading using opposite Vivint Smart and Employers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivint Smart 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 Vivint Smart Home 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.