Correlation Between Emerson Radio and Mechel OAO
Can any of the company-specific risk be diversified away by investing in both Emerson Radio and Mechel OAO 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 Mechel OAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Mechel OAO, you can compare the effects of market volatilities on Emerson Radio and Mechel OAO 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 Mechel OAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Mechel OAO.
Diversification Opportunities for Emerson Radio and Mechel OAO
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerson and Mechel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Mechel OAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechel OAO 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 Mechel OAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechel OAO has no effect on the direction of Emerson Radio i.e., Emerson Radio and Mechel OAO go up and down completely randomly.
Pair Corralation between Emerson Radio and Mechel OAO
If you would invest (100.00) in Mechel OAO on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Mechel OAO or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Emerson Radio vs. Mechel OAO
Performance |
| Timeline |
| Emerson Radio |
| Mechel OAO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Emerson Radio and Mechel OAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Mechel OAO
The main advantage of trading using opposite Emerson Radio and Mechel OAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio position performs unexpectedly, Mechel OAO 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 Mechel OAO will offset losses from the drop in Mechel OAO'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 |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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