Correlation Between Empire Global and Eterna Therapeutics

Can any of the company-specific risk be diversified away by investing in both Empire Global and Eterna Therapeutics 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 Empire Global and Eterna Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Empire Global Gaming and Eterna Therapeutics, you can compare the effects of market volatilities on Empire Global and Eterna Therapeutics 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 Empire Global with a short position of Eterna Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Global and Eterna Therapeutics.

Diversification Opportunities for Empire Global and Eterna Therapeutics

0.0

Correlation Coefficient

Empire Global  Eterna Therapeutics

Pay attention - limited upside

The 3 months correlation between Empire and Eterna is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming and Eterna Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eterna Therapeutics and Empire Global 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 Empire Global Gaming are associated (or correlated) with Eterna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eterna Therapeutics has no effect on the direction of Empire Global i.e., Empire Global and Eterna Therapeutics go up and down completely randomly.

Pair Corralation between Empire Global and Eterna Therapeutics

If you would invest  0.03  in Empire Global Gaming on February 4, 2024 and sell it today you would earn a total of  0.00  from holding Empire Global Gaming or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Empire Global Gaming  vs.  Eterna Therapeutics

Empire Global Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eterna Therapeutics

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eterna Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Eterna Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Empire Global and Eterna Therapeutics

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

The idea behind Empire Global Gaming and Eterna Therapeutics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.