Correlation Between AGL Energy and Emerson Radio
Can any of the company-specific risk be diversified away by investing in both AGL Energy and Emerson Radio 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 AGL Energy and Emerson Radio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGL Energy Limited and Emerson Radio, you can compare the effects of market volatilities on AGL Energy and Emerson Radio 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 AGL Energy with a short position of Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGL Energy and Emerson Radio.
Diversification Opportunities for AGL Energy and Emerson Radio
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AGL and Emerson is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AGL Energy Limited and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio and AGL Energy 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 AGL Energy Limited are associated (or correlated) with Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of AGL Energy i.e., AGL Energy and Emerson Radio go up and down completely randomly.
Pair Corralation between AGL Energy and Emerson Radio
Assuming the 90 days horizon AGL Energy Limited is expected to generate 0.9 times more return on investment than Emerson Radio. However, AGL Energy Limited is 1.12 times less risky than Emerson Radio. It trades about 0.05 of its potential returns per unit of risk. Emerson Radio is currently generating about 0.0 per unit of risk. If you would invest 528.00 in AGL Energy Limited on September 2, 2024 and sell it today you would earn a total of 177.00 from holding AGL Energy Limited or generate 33.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 60.89% |
| Values | Daily Returns |
AGL Energy Limited vs. Emerson Radio
Performance |
| Timeline |
| AGL Energy Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Emerson Radio |
AGL Energy and Emerson Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGL Energy and Emerson Radio
The main advantage of trading using opposite AGL Energy and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGL Energy position performs unexpectedly, Emerson Radio 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 Emerson Radio will offset losses from the drop in Emerson Radio's long position.| AGL Energy vs. Emerson Radio | AGL Energy vs. BJs Restaurants | AGL Energy vs. GEN Restaurant Group, | AGL Energy vs. Canlan Ice Sports |
| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Turtle Beach Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |