Correlation Between Emerald Expositions and CyberAgent

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

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

Diversification Opportunities for Emerald Expositions and CyberAgent

-0.15

Correlation Coefficient

Emerald Expositions  CyberAgent

Good diversification

The 3 months correlation between Emerald and CyberAgent is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Expositions Events and CyberAgent ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent ADR and Emerald Expositions 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 Emerald Expositions Events are associated (or correlated) with CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent ADR has no effect on the direction of Emerald Expositions i.e., Emerald Expositions and CyberAgent go up and down completely randomly.

Pair Corralation between Emerald Expositions and CyberAgent

Considering the 90-day investment horizon Emerald Expositions Events is expected to generate 1.96 times more return on investment than CyberAgent. However, Emerald Expositions is 1.96 times more volatile than CyberAgent ADR. It trades about 0.0 of its potential returns per unit of risk. CyberAgent ADR is currently generating about -0.22 per unit of risk. If you would invest  497.00  in Emerald Expositions Events on August 30, 2024 and sell it today you would lose (14.00) from holding Emerald Expositions Events or give up 2.82% of portfolio value over 90 days.

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

Emerald Expositions Events  vs.  CyberAgent ADR

Emerald Expositions

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CyberAgent ADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Emerald Expositions and CyberAgent

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

The idea behind Emerald Expositions Events and CyberAgent ADR 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.