Correlation Between SWK Holdings and Emera Maine
Can any of the company-specific risk be diversified away by investing in both SWK Holdings and Emera Maine 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 SWK Holdings and Emera Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWK Holdings Corp and Emera Maine PFD, you can compare the effects of market volatilities on SWK Holdings and Emera Maine 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 SWK Holdings with a short position of Emera Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWK Holdings and Emera Maine.
Diversification Opportunities for SWK Holdings and Emera Maine
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SWK and Emera is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SWK Holdings Corp and Emera Maine PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Maine PFD and SWK Holdings 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 SWK Holdings Corp are associated (or correlated) with Emera Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Maine PFD has no effect on the direction of SWK Holdings i.e., SWK Holdings and Emera Maine go up and down completely randomly.
Pair Corralation between SWK Holdings and Emera Maine
If you would invest 1,589 in SWK Holdings Corp on October 6, 2024 and sell it today you would earn a total of 15.00 from holding SWK Holdings Corp or generate 0.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 5.0% |
Values | Daily Returns |
SWK Holdings Corp vs. Emera Maine PFD
Performance |
Timeline |
SWK Holdings Corp |
Emera Maine PFD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SWK Holdings and Emera Maine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SWK Holdings and Emera Maine
The main advantage of trading using opposite SWK Holdings and Emera Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWK Holdings position performs unexpectedly, Emera Maine 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 Maine will offset losses from the drop in Emera Maine's long position.SWK Holdings vs. Invesco Trust For | SWK Holdings vs. Invesco California Value | SWK Holdings vs. GAMCO Natural Resources | SWK Holdings vs. Nuveen Pennsylvania Quality |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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