Correlation Between Emera Maine and Visteon Corp
Can any of the company-specific risk be diversified away by investing in both Emera Maine and Visteon Corp 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 Emera Maine and Visteon Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emera Maine PFD and Visteon Corp, you can compare the effects of market volatilities on Emera Maine and Visteon Corp 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 Emera Maine with a short position of Visteon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emera Maine and Visteon Corp.
Diversification Opportunities for Emera Maine and Visteon Corp
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emera and Visteon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Emera Maine PFD and Visteon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visteon Corp and Emera Maine 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 Emera Maine PFD are associated (or correlated) with Visteon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visteon Corp has no effect on the direction of Emera Maine i.e., Emera Maine and Visteon Corp go up and down completely randomly.
Pair Corralation between Emera Maine and Visteon Corp
If you would invest 9,825 in Emera Maine PFD on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Emera Maine PFD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Emera Maine PFD vs. Visteon Corp
Performance |
| Timeline |
| Emera Maine PFD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Visteon Corp |
Emera Maine and Visteon Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emera Maine and Visteon Corp
The main advantage of trading using opposite Emera Maine and Visteon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emera Maine position performs unexpectedly, Visteon Corp 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 Visteon Corp will offset losses from the drop in Visteon Corp's long position.| Emera Maine vs. Amkor Technology | Emera Maine vs. Asure Software | Emera Maine vs. Taiwan Semiconductor Manufacturing | Emera Maine vs. Kulicke and Soffa |
| Visteon Corp vs. Ford Motor | Visteon Corp vs. General Motors | Visteon Corp vs. Goodyear Tire Rubber | Visteon Corp vs. Li Auto |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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