Correlation Between CyberAgent and Emerald Expositions

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

By analyzing existing cross correlation between CyberAgent ADR and Emerald Expositions Events, you can compare the effects of market volatilities on CyberAgent and Emerald Expositions 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 CyberAgent with a short position of Emerald Expositions. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberAgent and Emerald Expositions.

Diversification Opportunities for CyberAgent and Emerald Expositions

-0.77

Correlation Coefficient

CyberAgent  Emerald Expositions

Pay attention - limited upside

The 3 months correlation between CyberAgent and Emerald is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CyberAgent ADR and Emerald Expositions Events in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Expositions and CyberAgent 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 CyberAgent ADR are associated (or correlated) with Emerald Expositions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Expositions has no effect on the direction of CyberAgent i.e., CyberAgent and Emerald Expositions go up and down completely randomly.

Pair Corralation between CyberAgent and Emerald Expositions

Assuming the 90 days horizon CyberAgent ADR is expected to under-perform the Emerald Expositions. But the pink sheet apears to be less risky and, when comparing its historical volatility, CyberAgent ADR is 1.18 times less risky than Emerald Expositions. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Emerald Expositions Events is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  459.00  in Emerald Expositions Events on October 24, 2024 and sell it today you would lose (12.00) from holding Emerald Expositions Events or give up 2.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

CyberAgent ADR  vs.  Emerald Expositions Events

CyberAgent ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CyberAgent ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Emerald Expositions

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Emerald Expositions Events has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Emerald Expositions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CyberAgent and Emerald Expositions

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

The idea behind CyberAgent ADR and Emerald Expositions Events 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 CEOs Directory module to screen CEOs from public companies around the world.