Correlation Between Emerson Electric and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and Xinhua Winshare 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 Emerson Electric and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric Co and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Emerson Electric and Xinhua Winshare 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 Emerson Electric with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and Xinhua Winshare.
Diversification Opportunities for Emerson Electric and Xinhua Winshare
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerson and Xinhua is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric Co and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and Emerson Electric 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 Emerson Electric Co are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Emerson Electric i.e., Emerson Electric and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Emerson Electric and Xinhua Winshare
Assuming the 90 days horizon Emerson Electric Co is expected to generate 0.77 times more return on investment than Xinhua Winshare. However, Emerson Electric Co is 1.3 times less risky than Xinhua Winshare. It trades about 0.11 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.09 per unit of risk. If you would invest 9,723 in Emerson Electric Co on September 5, 2024 and sell it today you would earn a total of 2,961 from holding Emerson Electric Co or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Electric Co vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Emerson Electric |
| Xinhua Winshare Publ |
Emerson Electric and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and Xinhua Winshare
The main advantage of trading using opposite Emerson Electric and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| Emerson Electric vs. Schneider Electric SE | Emerson Electric vs. ABB | Emerson Electric vs. 3M Company | Emerson Electric vs. Parker Hannifin |
| Xinhua Winshare vs. Computer And Technologies | Xinhua Winshare vs. SMA Solar Technology | Xinhua Winshare vs. Align Technology | Xinhua Winshare vs. DXC Technology Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |