Correlation Between Emerson Radio and Bowlin Travel
Can any of the company-specific risk be diversified away by investing in both Emerson Radio and Bowlin Travel 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 Radio and Bowlin Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Bowlin Travel Centers, you can compare the effects of market volatilities on Emerson Radio and Bowlin Travel 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 Radio with a short position of Bowlin Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Bowlin Travel.
Diversification Opportunities for Emerson Radio and Bowlin Travel
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerson and Bowlin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Bowlin Travel Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowlin Travel Centers and Emerson Radio 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 Radio are associated (or correlated) with Bowlin Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowlin Travel Centers has no effect on the direction of Emerson Radio i.e., Emerson Radio and Bowlin Travel go up and down completely randomly.
Pair Corralation between Emerson Radio and Bowlin Travel
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the Bowlin Travel. In addition to that, Emerson Radio is 13.03 times more volatile than Bowlin Travel Centers. It trades about -0.27 of its total potential returns per unit of risk. Bowlin Travel Centers is currently generating about 0.22 per unit of volatility. If you would invest 396.00 in Bowlin Travel Centers on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Bowlin Travel Centers or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Bowlin Travel Centers
Performance |
| Timeline |
| Emerson Radio |
| Bowlin Travel Centers |
Emerson Radio and Bowlin Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Bowlin Travel
The main advantage of trading using opposite Emerson Radio and Bowlin Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio position performs unexpectedly, Bowlin Travel 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 Bowlin Travel will offset losses from the drop in Bowlin Travel's long position.| Emerson Radio vs. LG Display Co | Emerson Radio vs. Wearable Devices | Emerson Radio vs. Universal Electronics | Emerson Radio vs. Samsung Electronics Co |
| Bowlin Travel vs. Willamette Valley Vineyards | Bowlin Travel vs. Compania Cervecerias Unidas | Bowlin Travel vs. Teleflex Incorporated | Bowlin Travel vs. Emerson Radio |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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