Correlation Between EMC Public and Christiani Nielsen

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

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

Diversification Opportunities for EMC Public and Christiani Nielsen

0.22

Correlation Coefficient

EMC Public  Christiani Nielsen

Modest diversification

The 3 months correlation between EMC and Christiani is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding EMC Public and Christiani Nielsen Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christiani Nielsen Public and EMC Public 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 EMC Public are associated (or correlated) with Christiani Nielsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christiani Nielsen Public has no effect on the direction of EMC Public i.e., EMC Public and Christiani Nielsen go up and down completely randomly.

Pair Corralation between EMC Public and Christiani Nielsen

Assuming the 90 days trading horizon EMC Public is expected to generate 3.46 times more return on investment than Christiani Nielsen. However, EMC Public is 3.46 times more volatile than Christiani Nielsen Public. It trades about -0.03 of its potential returns per unit of risk. Christiani Nielsen Public is currently generating about -0.18 per unit of risk. If you would invest  8.00  in EMC Public on December 4, 2024 and sell it today you would lose (2.00) from holding EMC Public or give up 25.0% of portfolio value over 90 days.

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

EMC Public  vs.  Christiani Nielsen Public

EMC Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMC Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Christiani Nielsen Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Christiani Nielsen Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with EMC Public and Christiani Nielsen

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

The idea behind EMC Public and Christiani Nielsen Public 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.