Correlation Between Emerson Radio and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both Emerson Radio and Hamilton Beach 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 Hamilton Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Hamilton Beach Brands, you can compare the effects of market volatilities on Emerson Radio and Hamilton Beach 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 Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Hamilton Beach.
Diversification Opportunities for Emerson Radio and Hamilton Beach
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerson and Hamilton is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands 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 Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Emerson Radio i.e., Emerson Radio and Hamilton Beach go up and down completely randomly.
Pair Corralation between Emerson Radio and Hamilton Beach
Considering the 90-day investment horizon Emerson Radio is expected to generate 8.08 times less return on investment than Hamilton Beach. But when comparing it to its historical volatility, Emerson Radio is 1.17 times less risky than Hamilton Beach. It trades about 0.02 of its potential returns per unit of risk. Hamilton Beach Brands is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 920.00 in Hamilton Beach Brands on January 20, 2024 and sell it today you would earn a total of 1,209 from holding Hamilton Beach Brands or generate 131.41% 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. Hamilton Beach Brands
Performance |
| Timeline |
| Emerson Radio |
| Hamilton Beach Brands |
Emerson Radio and Hamilton Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Hamilton Beach
The main advantage of trading using opposite Emerson Radio and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio position performs unexpectedly, Hamilton Beach 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 Hamilton Beach will offset losses from the drop in Hamilton Beach's long position.| Emerson Radio vs. LG Display Co | Emerson Radio vs. The Singing Machine | Emerson Radio vs. Wearable Devices | Emerson Radio vs. Zepp Health Corp |
| Hamilton Beach vs. Meta Materials | Hamilton Beach vs. Sphere 3D Corp | Hamilton Beach vs. Katapult Holdings | Hamilton Beach vs. Aquagold International |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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