Correlation Between Just Eat and Emerge Commerce

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

By analyzing existing cross correlation between Just Eat Takeaway and Emerge Commerce, you can compare the effects of market volatilities on Just Eat and Emerge Commerce 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 Just Eat with a short position of Emerge Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Just Eat and Emerge Commerce.

Diversification Opportunities for Just Eat and Emerge Commerce

0.0

Correlation Coefficient

Just Eat  Emerge Commerce

Pay attention - limited upside

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

Pair Corralation between Just Eat and Emerge Commerce

If you would invest  2.51  in Emerge Commerce on December 29, 2024 and sell it today you would earn a total of  1.49  from holding Emerge Commerce or generate 59.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Just Eat Takeaway  vs.  Emerge Commerce

Just Eat Takeaway

Risk-Adjusted Performance

Very Weak

Over the last 90 days Just Eat Takeaway has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Just Eat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Emerge Commerce

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emerge Commerce are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, Emerge Commerce reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Just Eat and Emerge Commerce

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

The idea behind Just Eat Takeaway and Emerge Commerce 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.