Correlation Between Glory Star and Emerald Expositions

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

By analyzing existing cross correlation between Glory Star New and Emerald Expositions Events, you can compare the effects of market volatilities on Glory Star and Emerald Expositions 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 Glory Star with a short position of Emerald Expositions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glory Star and Emerald Expositions.

Diversification Opportunities for Glory Star and Emerald Expositions

0.68

Correlation Coefficient

Glory Star  Emerald Expositions

Poor diversification

The 3 months correlation between Glory and Emerald is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Glory Star New and Emerald Expositions Events in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Expositions and Glory Star 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 Glory Star New are associated (or correlated) with Emerald Expositions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Expositions has no effect on the direction of Glory Star i.e., Glory Star and Emerald Expositions go up and down completely randomly.

Pair Corralation between Glory Star and Emerald Expositions

Assuming the 90 days horizon Glory Star New is expected to generate 30.74 times more return on investment than Emerald Expositions. However, Glory Star is 30.74 times more volatile than Emerald Expositions Events. It trades about 0.15 of its potential returns per unit of risk. Emerald Expositions Events is currently generating about -0.13 per unit of risk. If you would invest  0.10  in Glory Star New on December 28, 2024 and sell it today you would lose (0.01) from holding Glory Star New or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	49.18%
Values	Daily Returns

Glory Star New  vs.  Emerald Expositions Events

Glory Star New

Risk-Adjusted Performance

Good

Over the last 90 days Glory Star New has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile technical and fundamental indicators, Glory Star showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Glory Star and Emerald Expositions

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

The idea behind Glory Star New and Emerald Expositions Events 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.