Correlation Between Spectrum Brands and Empire Global

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

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

Diversification Opportunities for Spectrum Brands and Empire Global

0.0

Correlation Coefficient

Spectrum Brands  Empire Global

Pay attention - limited upside

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

Pair Corralation between Spectrum Brands and Empire Global

If you would invest  8,166  in Spectrum Brands Holdings on February 19, 2024 and sell it today you would earn a total of  1,040  from holding Spectrum Brands Holdings or generate 12.74% return on investment over 90 days.

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

Spectrum Brands Holdings  vs.  Empire Global Gaming

Spectrum Brands Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Brands Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Spectrum Brands sustained solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Spectrum Brands and Empire Global

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

The idea behind Spectrum Brands Holdings and Empire Global Gaming 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.