Correlation Between Emerson Electric and MYT Netherlands
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and MYT Netherlands 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 MYT Netherlands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and MYT Netherlands Parent, you can compare the effects of market volatilities on Emerson Electric and MYT Netherlands 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 MYT Netherlands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and MYT Netherlands.
Diversification Opportunities for Emerson Electric and MYT Netherlands
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Emerson and MYT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and MYT Netherlands Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYT Netherlands Parent 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 MYT Netherlands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYT Netherlands Parent has no effect on the direction of Emerson Electric i.e., Emerson Electric and MYT Netherlands go up and down completely randomly.
Pair Corralation between Emerson Electric and MYT Netherlands
Considering the 90-day investment horizon Emerson Electric is expected to generate 1.21 times less return on investment than MYT Netherlands. But when comparing it to its historical volatility, Emerson Electric is 3.54 times less risky than MYT Netherlands. It trades about 0.07 of its potential returns per unit of risk. MYT Netherlands Parent is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 997.00 in MYT Netherlands Parent on November 7, 2024 and sell it today you would lose (64.00) from holding MYT Netherlands Parent or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Electric vs. MYT Netherlands Parent
Performance |
| Timeline |
| Emerson Electric |
| MYT Netherlands Parent |
Emerson Electric and MYT Netherlands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and MYT Netherlands
The main advantage of trading using opposite Emerson Electric and MYT Netherlands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, MYT Netherlands 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 MYT Netherlands will offset losses from the drop in MYT Netherlands' long position.| Emerson Electric vs. Dover | Emerson Electric vs. Parker Hannifin | Emerson Electric vs. Pentair PLC | Emerson Electric vs. Eaton PLC |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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