Correlation Between Emerson Electric and MASSMU
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By analyzing existing cross correlation between Emerson Electric and MASSMU 5077 15 FEB 69, you can compare the effects of market volatilities on Emerson Electric and MASSMU 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 MASSMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and MASSMU.
Diversification Opportunities for Emerson Electric and MASSMU
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Emerson and MASSMU is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and MASSMU 5077 15 FEB 69 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASSMU 5077 15 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 MASSMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASSMU 5077 15 has no effect on the direction of Emerson Electric i.e., Emerson Electric and MASSMU go up and down completely randomly.
Pair Corralation between Emerson Electric and MASSMU
Considering the 90-day investment horizon Emerson Electric is expected to generate 4.21 times less return on investment than MASSMU. But when comparing it to its historical volatility, Emerson Electric is 1.53 times less risky than MASSMU. It trades about 0.12 of its potential returns per unit of risk. MASSMU 5077 15 FEB 69 is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 8,968 in MASSMU 5077 15 FEB 69 on September 13, 2024 and sell it today you would earn a total of 222.00 from holding MASSMU 5077 15 FEB 69 or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.73% |
| Values | Daily Returns |
Emerson Electric vs. MASSMU 5077 15 FEB 69
Performance |
| Timeline |
| Emerson Electric |
| MASSMU 5077 15 |
Emerson Electric and MASSMU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and MASSMU
The main advantage of trading using opposite Emerson Electric and MASSMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric position performs unexpectedly, MASSMU 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 MASSMU will offset losses from the drop in MASSMU's long position.| Emerson Electric vs. Dover | Emerson Electric vs. Parker Hannifin | Emerson Electric vs. Pentair PLC | Emerson Electric vs. Eaton PLC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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