Correlation Between Embecta Corp and Cooper Companies,

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

By analyzing existing cross correlation between Embecta Corp and The Cooper Companies,, you can compare the effects of market volatilities on Embecta Corp and Cooper Companies, 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 Embecta Corp with a short position of Cooper Companies,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embecta Corp and Cooper Companies,.

Diversification Opportunities for Embecta Corp and Cooper Companies,

0.11

Correlation Coefficient

Embecta Corp  Cooper Companies,

Average diversification

The 3 months correlation between Embecta and Cooper is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp and The Cooper Companies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Companies, and Embecta Corp 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 Embecta Corp are associated (or correlated) with Cooper Companies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Companies, has no effect on the direction of Embecta Corp i.e., Embecta Corp and Cooper Companies, go up and down completely randomly.

Pair Corralation between Embecta Corp and Cooper Companies,

Given the investment horizon of 90 days Embecta Corp is expected to under-perform the Cooper Companies,. In addition to that, Embecta Corp is 1.49 times more volatile than The Cooper Companies,. It trades about -0.3 of its total potential returns per unit of risk. The Cooper Companies, is currently generating about -0.15 per unit of volatility. If you would invest  10,446  in The Cooper Companies, on November 29, 2024 and sell it today you would lose (1,420) from holding The Cooper Companies, or give up 13.59% of portfolio value over 90 days.

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

Embecta Corp  vs.  The Cooper Companies,

Embecta Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Embecta Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cooper Companies,

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Embecta Corp and Cooper Companies,

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

The idea behind Embecta Corp and The Cooper Companies, 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.