Correlation Between Rocky Mountain and Emera Pref
Can any of the company-specific risk be diversified away by investing in both Rocky Mountain and Emera Pref 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 Rocky Mountain and Emera Pref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Mountain Liquor and Emera Pref A, you can compare the effects of market volatilities on Rocky Mountain and Emera Pref 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 Rocky Mountain with a short position of Emera Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Mountain and Emera Pref.
Diversification Opportunities for Rocky Mountain and Emera Pref
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rocky and Emera is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Mountain Liquor and Emera Pref A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Pref A and Rocky Mountain 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 Rocky Mountain Liquor are associated (or correlated) with Emera Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Pref A has no effect on the direction of Rocky Mountain i.e., Rocky Mountain and Emera Pref go up and down completely randomly.
Pair Corralation between Rocky Mountain and Emera Pref
Assuming the 90 days horizon Rocky Mountain Liquor is expected to generate 5.28 times more return on investment than Emera Pref. However, Rocky Mountain is 5.28 times more volatile than Emera Pref A. It trades about 0.14 of its potential returns per unit of risk. Emera Pref A is currently generating about 0.55 per unit of risk. If you would invest 10.00 in Rocky Mountain Liquor on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Rocky Mountain Liquor or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Rocky Mountain Liquor vs. Emera Pref A
Performance |
| Timeline |
| Rocky Mountain Liquor |
| Emera Pref A |
Rocky Mountain and Emera Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Mountain and Emera Pref
The main advantage of trading using opposite Rocky Mountain and Emera Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Mountain position performs unexpectedly, Emera Pref 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 Emera Pref will offset losses from the drop in Emera Pref's long position.| Rocky Mountain vs. Upstart Investments | Rocky Mountain vs. AGF Management Limited | Rocky Mountain vs. Brookfield Asset Management | Rocky Mountain vs. CNJ Capital Investments |
| Emera Pref vs. Mako Mining Corp | Emera Pref vs. Rocky Mountain Liquor | Emera Pref vs. T2 Metals Corp | Emera Pref vs. Magna Mining |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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