Correlation Between EMERSON ELECTRIC and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both EMERSON ELECTRIC and LUMI GRUPPEN 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 LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMERSON ELECTRIC and LUMI GRUPPEN AS, you can compare the effects of market volatilities on EMERSON ELECTRIC and LUMI GRUPPEN 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 LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMERSON ELECTRIC and LUMI GRUPPEN.
Diversification Opportunities for EMERSON ELECTRIC and LUMI GRUPPEN
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMERSON and LUMI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding EMERSON ELECTRIC and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN AS 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 are associated (or correlated) with LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of EMERSON ELECTRIC i.e., EMERSON ELECTRIC and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between EMERSON ELECTRIC and LUMI GRUPPEN
Assuming the 90 days trading horizon EMERSON ELECTRIC is expected to generate 5.11 times less return on investment than LUMI GRUPPEN. But when comparing it to its historical volatility, EMERSON ELECTRIC is 4.5 times less risky than LUMI GRUPPEN. It trades about 0.12 of its potential returns per unit of risk. LUMI GRUPPEN AS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 70.00 in LUMI GRUPPEN AS on October 12, 2024 and sell it today you would earn a total of 41.00 from holding LUMI GRUPPEN AS or generate 58.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
EMERSON ELECTRIC vs. LUMI GRUPPEN AS
Performance |
| Timeline |
| EMERSON ELECTRIC |
| LUMI GRUPPEN AS |
EMERSON ELECTRIC and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMERSON ELECTRIC and LUMI GRUPPEN
The main advantage of trading using opposite EMERSON ELECTRIC and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMERSON ELECTRIC position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.| EMERSON ELECTRIC vs. Siamgas And Petrochemicals | EMERSON ELECTRIC vs. Sekisui Chemical Co | EMERSON ELECTRIC vs. Kingdee International Software | EMERSON ELECTRIC vs. Casio Computer CoLtd |
| LUMI GRUPPEN vs. TT Electronics PLC | LUMI GRUPPEN vs. Penta Ocean Construction Co | LUMI GRUPPEN vs. Meiko Electronics Co | LUMI GRUPPEN vs. Daito Trust Construction |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |