Correlation Between Emerson Radio and SUPER HI

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

By analyzing existing cross correlation between Emerson Radio and SUPER HI INTERNATIONAL, you can compare the effects of market volatilities on Emerson Radio and SUPER HI 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 Emerson Radio with a short position of SUPER HI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and SUPER HI.

Diversification Opportunities for Emerson Radio and SUPER HI

-0.65

Correlation Coefficient

Emerson Radio  SUPER HI

Excellent diversification

The 3 months correlation between Emerson and SUPER is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL and Emerson Radio 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 Emerson Radio are associated (or correlated) with SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of Emerson Radio i.e., Emerson Radio and SUPER HI go up and down completely randomly.

Pair Corralation between Emerson Radio and SUPER HI

Considering the 90-day investment horizon Emerson Radio is expected to generate 1.29 times more return on investment than SUPER HI. However, Emerson Radio is 1.29 times more volatile than SUPER HI INTERNATIONAL. It trades about 0.03 of its potential returns per unit of risk. SUPER HI INTERNATIONAL is currently generating about -0.03 per unit of risk. If you would invest  43.00  in Emerson Radio on December 20, 2024 and sell it today you would earn a total of  1.00  from holding Emerson Radio or generate 2.33% return on investment over 90 days.

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

Emerson Radio  vs.  SUPER HI INTERNATIONAL

Emerson Radio

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Emerson Radio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Emerson Radio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SUPER HI INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUPER HI INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Emerson Radio and SUPER HI

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

The idea behind Emerson Radio and SUPER HI INTERNATIONAL 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.