Correlation Between Emerge Commerce and Leslies
Can any of the company-specific risk be diversified away by investing in both Emerge Commerce and Leslies 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 Emerge Commerce and Leslies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerge Commerce and Leslies, you can compare the effects of market volatilities on Emerge Commerce and Leslies 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 Emerge Commerce with a short position of Leslies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerge Commerce and Leslies.
Diversification Opportunities for Emerge Commerce and Leslies
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerge and Leslies is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Emerge Commerce and Leslies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leslies and Emerge Commerce 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 Emerge Commerce are associated (or correlated) with Leslies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leslies has no effect on the direction of Emerge Commerce i.e., Emerge Commerce and Leslies go up and down completely randomly.
Pair Corralation between Emerge Commerce and Leslies
Assuming the 90 days horizon Emerge Commerce is expected to generate 31.98 times more return on investment than Leslies. However, Emerge Commerce is 31.98 times more volatile than Leslies. It trades about 0.13 of its potential returns per unit of risk. Leslies is currently generating about 0.07 per unit of risk. If you would invest 2.50 in Emerge Commerce on August 25, 2024 and sell it today you would earn a total of 0.01 from holding Emerge Commerce or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerge Commerce vs. Leslies
Performance |
| Timeline |
| Emerge Commerce |
| Leslies |
Emerge Commerce and Leslies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerge Commerce and Leslies
The main advantage of trading using opposite Emerge Commerce and Leslies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerge Commerce position performs unexpectedly, Leslies 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 Leslies will offset losses from the drop in Leslies' long position.| Emerge Commerce vs. 1StdibsCom | Emerge Commerce vs. Natural Health Trend | Emerge Commerce vs. Monotaro Co | Emerge Commerce vs. Hour Loop |
| Leslies vs. Oriental Culture Holding | Leslies vs. Hour Loop | Leslies vs. Qurate Retail Series | Leslies vs. Emerge Commerce |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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