Correlation Between Embraer SA and Triumph
Can any of the company-specific risk be diversified away by investing in both Embraer SA and Triumph 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 Embraer SA and Triumph into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embraer SA ADR and Triumph Group, you can compare the effects of market volatilities on Embraer SA and Triumph 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 Embraer SA with a short position of Triumph. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embraer SA and Triumph.
Diversification Opportunities for Embraer SA and Triumph
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Embraer and Triumph is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Embraer SA ADR and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group and Embraer SA 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 Embraer SA ADR are associated (or correlated) with Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of Embraer SA i.e., Embraer SA and Triumph go up and down completely randomly.
Pair Corralation between Embraer SA and Triumph
If you would invest 3,419 in Embraer SA ADR on August 31, 2024 and sell it today you would earn a total of 401.00 from holding Embraer SA ADR or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Embraer SA ADR vs. Triumph Group
Performance |
| Timeline |
| Embraer SA ADR |
| Triumph Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Embraer SA and Triumph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embraer SA and Triumph
The main advantage of trading using opposite Embraer SA and Triumph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embraer SA position performs unexpectedly, Triumph 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 Triumph will offset losses from the drop in Triumph's long position.| Embraer SA vs. HEICO | Embraer SA vs. Vertical Aerospace | Embraer SA vs. Rolls Royce Holdings plc | Embraer SA vs. Rocket Lab USA |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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