Correlation Between Southern PublishingMedia and Emdoor Information
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By analyzing existing cross correlation between Southern PublishingMedia Co and Emdoor Information Co, you can compare the effects of market volatilities on Southern PublishingMedia and Emdoor Information 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 Southern PublishingMedia with a short position of Emdoor Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern PublishingMedia and Emdoor Information.
Diversification Opportunities for Southern PublishingMedia and Emdoor Information
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southern and Emdoor is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Southern PublishingMedia Co and Emdoor Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emdoor Information and Southern PublishingMedia 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 Southern PublishingMedia Co are associated (or correlated) with Emdoor Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emdoor Information has no effect on the direction of Southern PublishingMedia i.e., Southern PublishingMedia and Emdoor Information go up and down completely randomly.
Pair Corralation between Southern PublishingMedia and Emdoor Information
Assuming the 90 days trading horizon Southern PublishingMedia Co is expected to generate 0.98 times more return on investment than Emdoor Information. However, Southern PublishingMedia Co is 1.02 times less risky than Emdoor Information. It trades about 0.05 of its potential returns per unit of risk. Emdoor Information Co is currently generating about 0.01 per unit of risk. If you would invest 811.00 in Southern PublishingMedia Co on October 16, 2024 and sell it today you would earn a total of 608.00 from holding Southern PublishingMedia Co or generate 74.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.7% |
| Values | Daily Returns |
Southern PublishingMedia Co vs. Emdoor Information Co
Performance |
| Timeline |
| Southern PublishingMedia |
| Emdoor Information |
Southern PublishingMedia and Emdoor Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern PublishingMedia and Emdoor Information
The main advantage of trading using opposite Southern PublishingMedia and Emdoor Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern PublishingMedia position performs unexpectedly, Emdoor Information 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 Emdoor Information will offset losses from the drop in Emdoor Information's long position.The idea behind Southern PublishingMedia Co and Emdoor Information Co 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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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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