Correlation Between Emerald Expositions and Dolphin Entertainment

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

Diversification Opportunities for Emerald Expositions and Dolphin Entertainment

-0.49

Correlation Coefficient

Emerald Expositions  Dolphin Entertainment

Very good diversification

The 3 months correlation between Emerald and Dolphin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Expositions Events and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment 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 Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Emerald Expositions i.e., Emerald Expositions and Dolphin Entertainment go up and down completely randomly.

Pair Corralation between Emerald Expositions and Dolphin Entertainment

Considering the 90-day investment horizon Emerald Expositions Events is expected to under-perform the Dolphin Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Emerald Expositions Events is 4.17 times less risky than Dolphin Entertainment. The stock trades about -0.13 of its potential returns per unit of risk. The Dolphin Entertainment is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Dolphin Entertainment on October 22, 2024 and sell it today you would earn a total of  9.00  from holding Dolphin Entertainment or generate 9.47% return on investment over 90 days.

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

Emerald Expositions Events  vs.  Dolphin Entertainment

Emerald Expositions

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Emerald Expositions Events are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Dolphin Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Emerald Expositions and Dolphin Entertainment

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

The idea behind Emerald Expositions Events and Dolphin Entertainment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.