Correlation Between EMC Public and Finansa Public
Can any of the company-specific risk be diversified away by investing in both EMC Public and Finansa 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 Finansa 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 Finansa Public, you can compare the effects of market volatilities on EMC Public and Finansa 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 Finansa Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMC Public and Finansa Public.
Diversification Opportunities for EMC Public and Finansa Public
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMC and Finansa is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding EMC Public and Finansa Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finansa 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 Finansa Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finansa Public has no effect on the direction of EMC Public i.e., EMC Public and Finansa Public go up and down completely randomly.
Pair Corralation between EMC Public and Finansa Public
Assuming the 90 days trading horizon EMC Public is expected to generate 4.51 times more return on investment than Finansa Public. However, EMC Public is 4.51 times more volatile than Finansa Public. It trades about 0.13 of its potential returns per unit of risk. Finansa Public is currently generating about -0.38 per unit of risk. If you would invest 7.00 in EMC Public on October 24, 2024 and sell it today you would earn a total of 1.00 from holding EMC Public or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
EMC Public vs. Finansa Public
Performance |
| Timeline |
| EMC Public |
| Finansa Public |
EMC Public and Finansa Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMC Public and Finansa Public
The main advantage of trading using opposite EMC Public and Finansa Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMC Public position performs unexpectedly, Finansa 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 Finansa Public will offset losses from the drop in Finansa Public's long position.| EMC Public vs. Italian Thai Development Public | EMC Public vs. Eastern Commercial Leasing | EMC Public vs. CH Karnchang Public | EMC Public vs. Christiani Nielsen Public |
| Finansa Public vs. Asia Plus Group | Finansa Public vs. KGI Securities Public | Finansa Public vs. Bank of Ayudhya | Finansa Public vs. CH Karnchang Public |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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