Correlation Between Empire Metals and Hershey
Can any of the company-specific risk be diversified away by investing in both Empire Metals and Hershey 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 Empire Metals and Hershey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Metals Limited and Hershey Co, you can compare the effects of market volatilities on Empire Metals and Hershey 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 Empire Metals with a short position of Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and Hershey.
Diversification Opportunities for Empire Metals and Hershey
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Empire and Hershey is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey and Empire Metals 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 Empire Metals Limited are associated (or correlated) with Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Empire Metals i.e., Empire Metals and Hershey go up and down completely randomly.
Pair Corralation between Empire Metals and Hershey
Assuming the 90 days trading horizon Empire Metals Limited is expected to generate 2.74 times more return on investment than Hershey. However, Empire Metals is 2.74 times more volatile than Hershey Co. It trades about 0.0 of its potential returns per unit of risk. Hershey Co is currently generating about -0.01 per unit of risk. If you would invest 920.00 in Empire Metals Limited on October 16, 2024 and sell it today you would lose (195.00) from holding Empire Metals Limited or give up 21.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.25% |
| Values | Daily Returns |
Empire Metals Limited vs. Hershey Co
Performance |
| Timeline |
| Empire Metals Limited |
| Hershey |
Empire Metals and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Metals and Hershey
The main advantage of trading using opposite Empire Metals and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Empire Metals vs. Wheaton Precious Metals | Empire Metals vs. JD Sports Fashion | Empire Metals vs. URU Metals | Empire Metals vs. Science in Sport |
| Hershey vs. Verizon Communications | Hershey vs. Universal Display Corp | Hershey vs. Europa Metals | Hershey vs. Empire Metals Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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