Correlation Between Emerson Radio and Granite Real
Can any of the company-specific risk be diversified away by investing in both Emerson Radio and Granite Real 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 Granite Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Granite Real Estate, you can compare the effects of market volatilities on Emerson Radio and Granite Real 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 Granite Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Granite Real.
Diversification Opportunities for Emerson Radio and Granite Real
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Emerson and Granite is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Granite Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Real Estate 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 Granite Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Real Estate has no effect on the direction of Emerson Radio i.e., Emerson Radio and Granite Real go up and down completely randomly.
Pair Corralation between Emerson Radio and Granite Real
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the Granite Real. In addition to that, Emerson Radio is 1.66 times more volatile than Granite Real Estate. It trades about -0.27 of its total potential returns per unit of risk. Granite Real Estate is currently generating about 0.05 per unit of volatility. If you would invest 5,360 in Granite Real Estate on September 2, 2024 and sell it today you would earn a total of 84.00 from holding Granite Real Estate or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Granite Real Estate
Performance |
| Timeline |
| Emerson Radio |
| Granite Real Estate |
Emerson Radio and Granite Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Granite Real
The main advantage of trading using opposite Emerson Radio and Granite Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio position performs unexpectedly, Granite Real 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 Granite Real will offset losses from the drop in Granite Real's 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 |
| Granite Real vs. Molson Coors Brewing | Granite Real vs. Sealed Air | Granite Real vs. Willamette Valley Vineyards | Granite Real vs. Hudson Technologies |
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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