Correlation Between Emera Srs and Emera
Can any of the company-specific risk be diversified away by investing in both Emera Srs and Emera 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 Srs and Emera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emera Srs C and Emera Inc, you can compare the effects of market volatilities on Emera Srs and Emera 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 Srs with a short position of Emera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emera Srs and Emera.
Diversification Opportunities for Emera Srs and Emera
Almost no diversification
The 3 months correlation between Emera and Emera is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Emera Srs C and Emera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Inc and Emera Srs 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 Srs C are associated (or correlated) with Emera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Inc has no effect on the direction of Emera Srs i.e., Emera Srs and Emera go up and down completely randomly.
Pair Corralation between Emera Srs and Emera
Assuming the 90 days trading horizon Emera Srs C is expected to generate 0.77 times more return on investment than Emera. However, Emera Srs C is 1.29 times less risky than Emera. It trades about 0.08 of its potential returns per unit of risk. Emera Inc is currently generating about 0.04 per unit of risk. If you would invest 1,789 in Emera Srs C on November 2, 2024 and sell it today you would earn a total of 614.00 from holding Emera Srs C or generate 34.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emera Srs C vs. Emera Inc
Performance |
| Timeline |
| Emera Srs C |
| Emera Inc |
Emera Srs and Emera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emera Srs and Emera
The main advantage of trading using opposite Emera Srs and Emera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emera Srs position performs unexpectedly, Emera 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 Emera will offset losses from the drop in Emera's long position.| Emera Srs vs. Exco Technologies Limited | Emera Srs vs. Northstar Clean Technologies | Emera Srs vs. Leons Furniture Limited | Emera Srs vs. AGF Management Limited |
| Emera vs. Emera Pref F | Emera vs. Emera Srs C | Emera vs. Fortis Pref M | Emera vs. Brookfield Renewable Partners |
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 Stocks Directory module to find actively traded stocks across global markets.
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