Correlation Between EMC Public and Everland Public
Can any of the company-specific risk be diversified away by investing in both EMC Public and Everland Public 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 EMC Public and Everland Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMC Public and Everland Public, you can compare the effects of market volatilities on EMC Public and Everland Public 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 EMC Public with a short position of Everland Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMC Public and Everland Public.
Diversification Opportunities for EMC Public and Everland Public
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EMC and Everland is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding EMC Public and Everland Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everland Public and EMC Public 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 EMC Public are associated (or correlated) with Everland Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everland Public has no effect on the direction of EMC Public i.e., EMC Public and Everland Public go up and down completely randomly.
Pair Corralation between EMC Public and Everland Public
Assuming the 90 days trading horizon EMC Public is expected to under-perform the Everland Public. In addition to that, EMC Public is 1.27 times more volatile than Everland Public. It trades about -0.09 of its total potential returns per unit of risk. Everland Public is currently generating about 0.03 per unit of volatility. If you would invest 12.00 in Everland Public on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Everland Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMC Public vs. Everland Public
Performance |
| Timeline |
| EMC Public |
| Everland Public |
EMC Public and Everland Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMC Public and Everland Public
The main advantage of trading using opposite EMC Public and Everland Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMC Public position performs unexpectedly, Everland Public 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 Everland Public will offset losses from the drop in Everland Public's long position.| EMC Public vs. Gulf Energy Development | EMC Public vs. Energy Absolute Public | EMC Public vs. WHA Public | EMC Public vs. Bangkok Expressway and |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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