Correlation Between Emerson Radio and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Emerson Radio and Dine Brands 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 Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Dine Brands Global, you can compare the effects of market volatilities on Emerson Radio and Dine Brands 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 Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Dine Brands.
Diversification Opportunities for Emerson Radio and Dine Brands
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerson and Dine is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Emerson Radio i.e., Emerson Radio and Dine Brands go up and down completely randomly.
Pair Corralation between Emerson Radio and Dine Brands
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the Dine Brands. But the stock apears to be less risky and, when comparing its historical volatility, Emerson Radio is 1.33 times less risky than Dine Brands. The stock trades about -0.3 of its potential returns per unit of risk. The Dine Brands Global is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,044 in Dine Brands Global on September 1, 2024 and sell it today you would earn a total of 548.00 from holding Dine Brands Global or generate 18.0% 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. Dine Brands Global
Performance |
| Timeline |
| Emerson Radio |
| Dine Brands Global |
Emerson Radio and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Dine Brands
The main advantage of trading using opposite Emerson Radio and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Turtle Beach Corp |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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