Correlation Between John Wiley and Emerald Expositions

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

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

Diversification Opportunities for John Wiley and Emerald Expositions

-0.01

Correlation Coefficient

John Wiley  Emerald Expositions

Good diversification

The 3 months correlation between John and Emerald is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding John Wiley Sons and Emerald Expositions Events in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Expositions and John Wiley 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 John Wiley Sons 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 John Wiley i.e., John Wiley and Emerald Expositions go up and down completely randomly.

Pair Corralation between John Wiley and Emerald Expositions

Considering the 90-day investment horizon John Wiley Sons is expected to generate 1.14 times more return on investment than Emerald Expositions. However, John Wiley is 1.14 times more volatile than Emerald Expositions Events. It trades about 0.01 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  4,446  in John Wiley Sons on December 27, 2024 and sell it today you would earn a total of  14.00  from holding John Wiley Sons or generate 0.31% return on investment over 90 days.

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

John Wiley Sons  vs.  Emerald Expositions Events

John Wiley Sons

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Wiley Sons are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, John Wiley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 John Wiley and Emerald Expositions

The main advantage of trading using opposite John Wiley and Emerald Expositions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Wiley 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 John Wiley Sons 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.