Correlation Between Emerson Electric and Fleetcor Technologies
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and Fleetcor Technologies 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 Fleetcor Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and Fleetcor Technologies, you can compare the effects of market volatilities on Emerson Electric and Fleetcor Technologies 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 Fleetcor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and Fleetcor Technologies.
Diversification Opportunities for Emerson Electric and Fleetcor Technologies
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerson and Fleetcor is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and Fleetcor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fleetcor Technologies 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 Fleetcor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fleetcor Technologies has no effect on the direction of Emerson Electric i.e., Emerson Electric and Fleetcor Technologies go up and down completely randomly.
Pair Corralation between Emerson Electric and Fleetcor Technologies
Considering the 90-day investment horizon Emerson Electric is expected to generate 0.99 times more return on investment than Fleetcor Technologies. However, Emerson Electric is 1.01 times less risky than Fleetcor Technologies. It trades about 0.11 of its potential returns per unit of risk. Fleetcor Technologies is currently generating about 0.06 per unit of risk. If you would invest 8,725 in Emerson Electric on August 26, 2024 and sell it today you would earn a total of 4,282 from holding Emerson Electric or generate 49.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 49.4% |
| Values | Daily Returns |
Emerson Electric vs. Fleetcor Technologies
Performance |
| Timeline |
| Emerson Electric |
| Fleetcor Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Emerson Electric and Fleetcor Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and Fleetcor Technologies
The main advantage of trading using opposite Emerson Electric and Fleetcor Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, Fleetcor Technologies 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 Fleetcor Technologies will offset losses from the drop in Fleetcor Technologies' long position.| Emerson Electric vs. Graco Inc | Emerson Electric vs. Franklin Electric Co | Emerson Electric vs. Flowserve | Emerson Electric vs. Donaldson |
| Fleetcor Technologies vs. Emerson Electric | Fleetcor Technologies vs. Marfrig Global Foods | Fleetcor Technologies vs. Topbuild Corp | Fleetcor Technologies vs. FitLife Brands, Common |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |