Correlation Between Emerson Electric and Nano Nuclear
Can any of the company-specific risk be diversified away by investing in both Emerson Electric and Nano Nuclear 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 Nano Nuclear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and Nano Nuclear Energy, you can compare the effects of market volatilities on Emerson Electric and Nano Nuclear 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 Nano Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and Nano Nuclear.
Diversification Opportunities for Emerson Electric and Nano Nuclear
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Emerson and Nano is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and Nano Nuclear Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Nuclear Energy 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 Nano Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Nuclear Energy has no effect on the direction of Emerson Electric i.e., Emerson Electric and Nano Nuclear go up and down completely randomly.
Pair Corralation between Emerson Electric and Nano Nuclear
Considering the 90-day investment horizon Emerson Electric is expected to generate 26.54 times less return on investment than Nano Nuclear. But when comparing it to its historical volatility, Emerson Electric is 9.09 times less risky than Nano Nuclear. It trades about 0.06 of its potential returns per unit of risk. Nano Nuclear Energy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 519.00 in Nano Nuclear Energy on August 27, 2024 and sell it today you would earn a total of 2,841 from holding Nano Nuclear Energy or generate 547.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 28.23% |
| Values | Daily Returns |
Emerson Electric vs. Nano Nuclear Energy
Performance |
| Timeline |
| Emerson Electric |
| Nano Nuclear Energy |
Emerson Electric and Nano Nuclear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and Nano Nuclear
The main advantage of trading using opposite Emerson Electric and Nano Nuclear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, Nano Nuclear 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 Nano Nuclear will offset losses from the drop in Nano Nuclear's long position.| Emerson Electric vs. Graco Inc | Emerson Electric vs. Franklin Electric Co | Emerson Electric vs. Flowserve | Emerson Electric vs. Donaldson |
| Nano Nuclear vs. Barnes Group | Nano Nuclear vs. Crane Company | Nano Nuclear vs. Hillenbrand | Nano Nuclear vs. Ingersoll Rand |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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