Correlation Between Emerson Electric and CMDKF
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and CMDKF 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 CMDKF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and CMDKF, you can compare the effects of market volatilities on Emerson Electric and CMDKF 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 CMDKF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and CMDKF.
Diversification Opportunities for Emerson Electric and CMDKF
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emerson and CMDKF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and CMDKF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMDKF 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 CMDKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMDKF has no effect on the direction of Emerson Electric i.e., Emerson Electric and CMDKF go up and down completely randomly.
Pair Corralation between Emerson Electric and CMDKF
If you would invest 12,623 in Emerson Electric on October 25, 2024 and sell it today you would earn a total of 371.00 from holding Emerson Electric or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Emerson Electric vs. CMDKF
Performance |
| Timeline |
| Emerson Electric |
| CMDKF |
Emerson Electric and CMDKF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and CMDKF
The main advantage of trading using opposite Emerson Electric and CMDKF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, CMDKF 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 CMDKF will offset losses from the drop in CMDKF's long position.| Emerson Electric vs. Bank of America | Emerson Electric vs. RLJ Lodging Trust | Emerson Electric vs. PennyMac Finl Svcs | Emerson Electric vs. Newhydrogen |
| CMDKF vs. Chemours Co | CMDKF vs. Toro Co | CMDKF vs. RBC Bearings Incorporated | CMDKF vs. Sensient Technologies |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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