Correlation Between Emclaire Financial and MYT Netherlands

Can any of the company-specific risk be diversified away by investing in both Emclaire Financial and MYT Netherlands 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 Emclaire Financial and MYT Netherlands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Emclaire Financial Corp and MYT Netherlands Parent, you can compare the effects of market volatilities on Emclaire Financial and MYT Netherlands 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 Emclaire Financial with a short position of MYT Netherlands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emclaire Financial and MYT Netherlands.

Diversification Opportunities for Emclaire Financial and MYT Netherlands

-0.87

Correlation Coefficient

Emclaire Financial  MYT Netherlands

Pay attention - limited upside

The 3 months correlation between Emclaire and MYT is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Emclaire Financial Corp and MYT Netherlands Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYT Netherlands Parent and Emclaire Financial 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 Emclaire Financial Corp are associated (or correlated) with MYT Netherlands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYT Netherlands Parent has no effect on the direction of Emclaire Financial i.e., Emclaire Financial and MYT Netherlands go up and down completely randomly.

Pair Corralation between Emclaire Financial and MYT Netherlands

If you would invest  431.00  in MYT Netherlands Parent on March 9, 2024 and sell it today you would earn a total of  143.00  from holding MYT Netherlands Parent or generate 33.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Emclaire Financial Corp  vs.  MYT Netherlands Parent

Emclaire Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emclaire Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Emclaire Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

MYT Netherlands Parent

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Emclaire Financial and MYT Netherlands

The main advantage of trading using opposite Emclaire Financial and MYT Netherlands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emclaire Financial position performs unexpectedly, MYT Netherlands 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 MYT Netherlands will offset losses from the drop in MYT Netherlands' long position.

The idea behind Emclaire Financial Corp and MYT Netherlands Parent pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.