Correlation Between Emerson Radio and JPM P

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

By analyzing existing cross correlation between Emerson Radio and JPM P J, you can compare the effects of market volatilities on Emerson Radio and JPM P 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 JPM P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and JPM P.

Diversification Opportunities for Emerson Radio and JPM P

0.34

Correlation Coefficient

Emerson Radio  JPM P

Weak diversification

The 3 months correlation between Emerson and JPM is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and JPM P J in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM P J 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 JPM P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM P J has no effect on the direction of Emerson Radio i.e., Emerson Radio and JPM P go up and down completely randomly.

Pair Corralation between Emerson Radio and JPM P

Considering the 90-day investment horizon Emerson Radio is expected to generate 5.09 times more return on investment than JPM P. However, Emerson Radio is 5.09 times more volatile than JPM P J. It trades about 0.19 of its potential returns per unit of risk. JPM P J is currently generating about 0.08 per unit of risk. If you would invest  42.00  in Emerson Radio on October 22, 2024 and sell it today you would earn a total of  9.00  from holding Emerson Radio or generate 21.43% return on investment over 90 days.

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

Emerson Radio  vs.  JPM P J

Emerson Radio

Risk-Adjusted Performance

2 of 100

Weak

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 February 2025.

JPM P J

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPM P J has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Preferred Stock's forward-looking indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with Emerson Radio and JPM P

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

The idea behind Emerson Radio and JPM P J 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.