Correlation Between Emerald Expositions and Cardlytics

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

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

Diversification Opportunities for Emerald Expositions and Cardlytics

-0.05

Correlation Coefficient

Emerald Expositions  Cardlytics

Good diversification

The 3 months correlation between Emerald and Cardlytics is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Expositions Events and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics and Emerald Expositions 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 Emerald Expositions Events are associated (or correlated) with Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of Emerald Expositions i.e., Emerald Expositions and Cardlytics go up and down completely randomly.

Pair Corralation between Emerald Expositions and Cardlytics

Considering the 90-day investment horizon Emerald Expositions is expected to generate 10.3 times less return on investment than Cardlytics. But when comparing it to its historical volatility, Emerald Expositions Events is 1.62 times less risky than Cardlytics. It trades about 0.0 of its potential returns per unit of risk. Cardlytics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  370.00  in Cardlytics on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Cardlytics or generate 0.0% return on investment over 90 days.

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

Emerald Expositions Events  vs.  Cardlytics

Emerald Expositions

Risk-Adjusted Performance

0 of 100

Very 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.

Cardlytics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cardlytics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Cardlytics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Emerald Expositions and Cardlytics

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

The idea behind Emerald Expositions Events and Cardlytics 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.