Correlation Between Emergent Biosolutions and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Emergent Biosolutions and Dow Jones 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 Emergent Biosolutions and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emergent Biosolutions and Dow Jones Industrial, you can compare the effects of market volatilities on Emergent Biosolutions and Dow Jones 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 Emergent Biosolutions with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Biosolutions and Dow Jones.
Diversification Opportunities for Emergent Biosolutions and Dow Jones
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emergent and Dow is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Biosolutions and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Emergent Biosolutions 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 Emergent Biosolutions are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Emergent Biosolutions i.e., Emergent Biosolutions and Dow Jones go up and down completely randomly.
Pair Corralation between Emergent Biosolutions and Dow Jones
Considering the 90-day investment horizon Emergent Biosolutions is expected to generate 7.93 times more return on investment than Dow Jones. However, Emergent Biosolutions is 7.93 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 967.00 in Emergent Biosolutions on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Emergent Biosolutions or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Biosolutions vs. Dow Jones Industrial
Performance |
| Timeline |
Emergent Biosolutions and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Emergent Biosolutions
Pair trading matchups for Emergent Biosolutions
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Emergent Biosolutions and Dow Jones
The main advantage of trading using opposite Emergent Biosolutions and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Biosolutions position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Emergent Biosolutions vs. Zoetis Inc | Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Akanda Corp |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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