Correlation Between EMedia Holdings and Brimstone Investment

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

By analyzing existing cross correlation between eMedia Holdings Limited and Brimstone Investment, you can compare the effects of market volatilities on EMedia Holdings and Brimstone Investment 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 EMedia Holdings with a short position of Brimstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and Brimstone Investment.

Diversification Opportunities for EMedia Holdings and Brimstone Investment

0.14

Correlation Coefficient

EMedia Holdings  Brimstone Investment

Average diversification

The 3 months correlation between EMedia and Brimstone is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and Brimstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brimstone Investment and EMedia 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 eMedia Holdings Limited are associated (or correlated) with Brimstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brimstone Investment has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and Brimstone Investment go up and down completely randomly.

Pair Corralation between EMedia Holdings and Brimstone Investment

Assuming the 90 days trading horizon EMedia Holdings is expected to generate 2.52 times less return on investment than Brimstone Investment. But when comparing it to its historical volatility, eMedia Holdings Limited is 2.4 times less risky than Brimstone Investment. It trades about 0.03 of its potential returns per unit of risk. Brimstone Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  55,000  in Brimstone Investment on September 1, 2024 and sell it today you would earn a total of  2,400  from holding Brimstone Investment or generate 4.36% return on investment over 90 days.

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

eMedia Holdings Limited  vs.  Brimstone Investment

eMedia Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in eMedia Holdings Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, EMedia Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Brimstone Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brimstone Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Brimstone Investment may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with EMedia Holdings and Brimstone Investment

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

The idea behind eMedia Holdings Limited and Brimstone Investment 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.