Correlation Between Aquarius Engines and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both Aquarius Engines and Emerson Electric 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 Aquarius Engines and Emerson Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquarius Engines and Emerson Electric, you can compare the effects of market volatilities on Aquarius Engines and Emerson Electric 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 Aquarius Engines with a short position of Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquarius Engines and Emerson Electric.
Diversification Opportunities for Aquarius Engines and Emerson Electric
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquarius and Emerson is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aquarius Engines and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric and Aquarius Engines 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 Aquarius Engines are associated (or correlated) with Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Aquarius Engines i.e., Aquarius Engines and Emerson Electric go up and down completely randomly.
Pair Corralation between Aquarius Engines and Emerson Electric
If you would invest 8,158 in Emerson Electric on September 2, 2024 and sell it today you would earn a total of 5,102 from holding Emerson Electric or generate 62.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.27% |
| Values | Daily Returns |
Aquarius Engines vs. Emerson Electric
Performance |
| Timeline |
| Aquarius Engines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Emerson Electric |
Aquarius Engines and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquarius Engines and Emerson Electric
The main advantage of trading using opposite Aquarius Engines and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquarius Engines position performs unexpectedly, Emerson Electric 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 Electric will offset losses from the drop in Emerson Electric's long position.| Aquarius Engines vs. Emerson Electric | Aquarius Engines vs. Eaton PLC | Aquarius Engines vs. Generac Holdings | Aquarius Engines vs. Cummins |
| Emerson Electric vs. Illinois Tool Works | Emerson Electric vs. Dover | Emerson Electric vs. Cummins | Emerson Electric vs. Parker Hannifin |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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