Correlation Between EMagin and Richardson Electronics
Can any of the company-specific risk be diversified away by investing in both EMagin and Richardson Electronics 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 EMagin and Richardson Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMagin and Richardson Electronics, you can compare the effects of market volatilities on EMagin and Richardson Electronics 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 EMagin with a short position of Richardson Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMagin and Richardson Electronics.
Diversification Opportunities for EMagin and Richardson Electronics
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EMagin and Richardson is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding EMagin and Richardson Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richardson Electronics and EMagin 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 EMagin are associated (or correlated) with Richardson Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richardson Electronics has no effect on the direction of EMagin i.e., EMagin and Richardson Electronics go up and down completely randomly.
Pair Corralation between EMagin and Richardson Electronics
Given the investment horizon of 90 days EMagin is expected to generate 1.5 times more return on investment than Richardson Electronics. However, EMagin is 1.5 times more volatile than Richardson Electronics. It trades about 0.14 of its potential returns per unit of risk. Richardson Electronics is currently generating about -0.02 per unit of risk. If you would invest 83.00 in EMagin on August 27, 2024 and sell it today you would earn a total of 117.00 from holding EMagin or generate 140.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
EMagin vs. Richardson Electronics
Performance |
| Timeline |
| EMagin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Richardson Electronics |
EMagin and Richardson Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMagin and Richardson Electronics
The main advantage of trading using opposite EMagin and Richardson Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMagin position performs unexpectedly, Richardson Electronics 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 Richardson Electronics will offset losses from the drop in Richardson Electronics' long position.| EMagin vs. KULR Technology Group | EMagin vs. Ouster Inc | EMagin vs. LightPath Technologies | EMagin vs. Daktronics |
| Richardson Electronics vs. Bel Fuse A | Richardson Electronics vs. LSI Industries | Richardson Electronics vs. Benchmark Electronics | Richardson Electronics vs. Plexus Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |