Correlation Between Emerson Electric and Neogen
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and Neogen, you can compare the effects of market volatilities on Emerson Electric and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and Neogen.
Diversification Opportunities for Emerson Electric and Neogen
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerson and Neogen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Emerson Electric i.e., Emerson Electric and Neogen go up and down completely randomly.
Pair Corralation between Emerson Electric and Neogen
Considering the 90-day investment horizon Emerson Electric is expected to generate 0.76 times more return on investment than Neogen. However, Emerson Electric is 1.32 times less risky than Neogen. It trades about 0.4 of its potential returns per unit of risk. Neogen is currently generating about -0.03 per unit of risk. If you would invest 10,857 in Emerson Electric on August 31, 2024 and sell it today you would earn a total of 2,402 from holding Emerson Electric or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Electric vs. Neogen
Performance |
| Timeline |
| Emerson Electric |
| Neogen |
Emerson Electric and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and Neogen
The main advantage of trading using opposite Emerson Electric and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Emerson Electric vs. Dover | Emerson Electric vs. Parker Hannifin | Emerson Electric vs. Pentair PLC | Emerson Electric vs. Eaton PLC |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |