Correlation Between Emetals and EMvision Medical

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

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

Diversification Opportunities for Emetals and EMvision Medical

0.18

Correlation Coefficient

Emetals  EMvision Medical

Average diversification

The 3 months correlation between Emetals and EMvision is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Emetals and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices and Emetals 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 Emetals are associated (or correlated) with EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Emetals i.e., Emetals and EMvision Medical go up and down completely randomly.

Pair Corralation between Emetals and EMvision Medical

Assuming the 90 days trading horizon Emetals is expected to under-perform the EMvision Medical. In addition to that, Emetals is 2.45 times more volatile than EMvision Medical Devices. It trades about -0.04 of its total potential returns per unit of risk. EMvision Medical Devices is currently generating about 0.05 per unit of volatility. If you would invest  188.00  in EMvision Medical Devices on December 24, 2024 and sell it today you would earn a total of  11.00  from holding EMvision Medical Devices or generate 5.85% return on investment over 90 days.

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

Emetals  vs.  EMvision Medical Devices

Emetals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Emetals 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

EMvision Medical Devices

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EMvision Medical Devices are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EMvision Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Emetals and EMvision Medical

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

The idea behind Emetals and EMvision Medical Devices 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.