Correlation Between Empire Global and Whitehaven Coal
Can any of the company-specific risk be diversified away by investing in both Empire Global and Whitehaven Coal 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 Empire Global and Whitehaven Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Global Gaming and Whitehaven Coal Limited, you can compare the effects of market volatilities on Empire Global and Whitehaven Coal 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 Empire Global with a short position of Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Global and Whitehaven Coal.
Diversification Opportunities for Empire Global and Whitehaven Coal
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Empire and Whitehaven is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming and Whitehaven Coal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal and Empire Global 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 Empire Global Gaming are associated (or correlated) with Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of Empire Global i.e., Empire Global and Whitehaven Coal go up and down completely randomly.
Pair Corralation between Empire Global and Whitehaven Coal
If you would invest 0.01 in Empire Global Gaming on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Empire Global Gaming or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Empire Global Gaming vs. Whitehaven Coal Limited
Performance |
| Timeline |
| Empire Global Gaming |
Risk-Adjusted Performance
Good
Weak | Strong |
| Whitehaven Coal |
Empire Global and Whitehaven Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Global and Whitehaven Coal
The main advantage of trading using opposite Empire Global and Whitehaven Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Global position performs unexpectedly, Whitehaven Coal 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 Whitehaven Coal will offset losses from the drop in Whitehaven Coal's long position.| Empire Global vs. Churchill Downs Incorporated | Empire Global vs. Gan | Empire Global vs. Rush Street Interactive | Empire Global vs. Lottery, Common Stock |
| Whitehaven Coal vs. New Hope | Whitehaven Coal vs. Adaro Energy Tbk | Whitehaven Coal vs. Thungela Resources Limited | Whitehaven Coal vs. Yancoal Australia |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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