Correlation Between Emerald Expositions and CyberAgent ADR

Can any of the company-specific risk be diversified away by investing in both Emerald Expositions and CyberAgent ADR 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 CyberAgent ADR 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 CyberAgent ADR, you can compare the effects of market volatilities on Emerald Expositions and CyberAgent ADR 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 CyberAgent ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Expositions and CyberAgent ADR.

Diversification Opportunities for Emerald Expositions and CyberAgent ADR

-0.68

Correlation Coefficient

Emerald Expositions  CyberAgent ADR

Excellent diversification

The 3 months correlation between Emerald and CyberAgent is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Expositions Events and CyberAgent ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent ADR 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 CyberAgent ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent ADR has no effect on the direction of Emerald Expositions i.e., Emerald Expositions and CyberAgent ADR go up and down completely randomly.

Pair Corralation between Emerald Expositions and CyberAgent ADR

If you would invest  310.00  in CyberAgent ADR on October 5, 2024 and sell it today you would earn a total of  0.00  from holding CyberAgent ADR or generate 0.0% return on investment over 90 days.

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

Emerald Expositions Events  vs.  CyberAgent ADR

Emerald Expositions

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Emerald Expositions Events are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Emerald Expositions showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Emerald Expositions and CyberAgent ADR

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

The idea behind Emerald Expositions Events and CyberAgent ADR 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.