Correlation Between Mirriad Advertising and Emerald Expositions

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

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

Diversification Opportunities for Mirriad Advertising and Emerald Expositions

0.62

Correlation Coefficient

Mirriad Advertising  Emerald Expositions

Poor diversification

The 3 months correlation between Mirriad and Emerald is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mirriad Advertising plc and Emerald Expositions Events in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Expositions and Mirriad Advertising 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 Mirriad Advertising plc 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 Mirriad Advertising i.e., Mirriad Advertising and Emerald Expositions go up and down completely randomly.

Pair Corralation between Mirriad Advertising and Emerald Expositions

Assuming the 90 days horizon Mirriad Advertising plc is expected to under-perform the Emerald Expositions. In addition to that, Mirriad Advertising is 1.68 times more volatile than Emerald Expositions Events. It trades about -0.18 of its total potential returns per unit of risk. Emerald Expositions Events is currently generating about -0.02 per unit of volatility. If you would invest  553.00  in Emerald Expositions Events on August 30, 2024 and sell it today you would lose (71.00) from holding Emerald Expositions Events or give up 12.84% of portfolio value over 90 days.

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

Mirriad Advertising plc  vs.  Emerald Expositions Events

Mirriad Advertising plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirriad Advertising plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with Mirriad Advertising and Emerald Expositions

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

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.