Correlation Between Faction Investment and Emera Pref

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Can any of the company-specific risk be diversified away by investing in both Faction Investment and Emera Pref 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 Faction Investment and Emera Pref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faction Investment Group and Emera Pref F, you can compare the effects of market volatilities on Faction Investment and Emera Pref 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 Faction Investment with a short position of Emera Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faction Investment and Emera Pref.

Diversification Opportunities for Faction Investment and Emera Pref

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Faction and Emera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and Emera Pref F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Pref F and Faction Investment 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 Faction Investment Group are associated (or correlated) with Emera Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Pref F has no effect on the direction of Faction Investment i.e., Faction Investment and Emera Pref go up and down completely randomly.

Pair Corralation between Faction Investment and Emera Pref

If you would invest  1,931  in Emera Pref F on October 7, 2024 and sell it today you would earn a total of  314.00  from holding Emera Pref F or generate 16.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy97.56%
ValuesDaily Returns

Faction Investment Group  vs.  Emera Pref F

 Performance 
       Timeline  
Faction Investment 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Faction Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Faction Investment is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Emera Pref F 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Emera Pref F are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Emera Pref sustained solid returns over the last few months and may actually be approaching a breakup point.

Faction Investment and Emera Pref Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Faction Investment and Emera Pref

The main advantage of trading using opposite Faction Investment and Emera Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faction Investment position performs unexpectedly, Emera Pref 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 Emera Pref will offset losses from the drop in Emera Pref's long position.
The idea behind Faction Investment Group and Emera Pref F 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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