Correlation Between Emerson Electric and Black Spade
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and Black Spade 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 Black Spade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and Black Spade Acquisition, you can compare the effects of market volatilities on Emerson Electric and Black Spade 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 Black Spade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and Black Spade.
Diversification Opportunities for Emerson Electric and Black Spade
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerson and Black is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and Black Spade Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Spade Acquisition 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 Black Spade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Spade Acquisition has no effect on the direction of Emerson Electric i.e., Emerson Electric and Black Spade go up and down completely randomly.
Pair Corralation between Emerson Electric and Black Spade
Considering the 90-day investment horizon Emerson Electric is expected to generate 4.14 times more return on investment than Black Spade. However, Emerson Electric is 4.14 times more volatile than Black Spade Acquisition. It trades about 0.2 of its potential returns per unit of risk. Black Spade Acquisition is currently generating about 0.05 per unit of risk. If you would invest 12,344 in Emerson Electric on November 4, 2024 and sell it today you would earn a total of 651.00 from holding Emerson Electric or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Electric vs. Black Spade Acquisition
Performance |
| Timeline |
| Emerson Electric |
| Black Spade Acquisition |
Emerson Electric and Black Spade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and Black Spade
The main advantage of trading using opposite Emerson Electric and Black Spade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, Black Spade 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 Black Spade will offset losses from the drop in Black Spade's long position.| Emerson Electric vs. Dover | Emerson Electric vs. Parker Hannifin | Emerson Electric vs. Pentair PLC | Emerson Electric vs. Eaton PLC |
| Black Spade vs. Perseus Mining Limited | Black Spade vs. Ainsworth Game Technology | Black Spade vs. Hurco Companies | Black Spade vs. Western Acquisition Ventures |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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