Correlation Between Emerald Expositions and Nextmart

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

Diversification Opportunities for Emerald Expositions and Nextmart

-0.23

Correlation Coefficient

Emerald Expositions  Nextmart

Very good diversification

The 3 months correlation between Emerald and Nextmart is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Expositions Events and Nextmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextmart 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 Nextmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextmart has no effect on the direction of Emerald Expositions i.e., Emerald Expositions and Nextmart go up and down completely randomly.

Pair Corralation between Emerald Expositions and Nextmart

If you would invest  0.06  in Nextmart on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Nextmart or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Emerald Expositions Events  vs.  Nextmart

Emerald Expositions

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nextmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nextmart has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Nextmart is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Emerald Expositions and Nextmart

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

The idea behind Emerald Expositions Events and Nextmart 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.