Correlation Between Emerson Electric and Fuji
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and Fuji 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 Fuji into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and Fuji Corporation, you can compare the effects of market volatilities on Emerson Electric and Fuji 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 Fuji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and Fuji.
Diversification Opportunities for Emerson Electric and Fuji
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerson and Fuji is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and Fuji Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji 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 Fuji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji has no effect on the direction of Emerson Electric i.e., Emerson Electric and Fuji go up and down completely randomly.
Pair Corralation between Emerson Electric and Fuji
If you would invest 10,822 in Emerson Electric on August 27, 2024 and sell it today you would earn a total of 2,185 from holding Emerson Electric or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Emerson Electric vs. Fuji Corp.
Performance |
| Timeline |
| Emerson Electric |
| Fuji |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Emerson Electric and Fuji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and Fuji
The main advantage of trading using opposite Emerson Electric and Fuji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, Fuji 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 Fuji will offset losses from the drop in Fuji's long position.| Emerson Electric vs. Graco Inc | Emerson Electric vs. Franklin Electric Co | Emerson Electric vs. Flowserve | Emerson Electric vs. Donaldson |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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