Correlation Between Buckle and Emerson Radio

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

By analyzing existing cross correlation between Buckle Inc and Emerson Radio, you can compare the effects of market volatilities on Buckle and Emerson Radio 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 Buckle with a short position of Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buckle and Emerson Radio.

Diversification Opportunities for Buckle and Emerson Radio

-0.04

Correlation Coefficient

Buckle  Emerson Radio

Good diversification

The 3 months correlation between Buckle and Emerson is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Buckle Inc and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio and Buckle 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 Buckle Inc are associated (or correlated) with Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of Buckle i.e., Buckle and Emerson Radio go up and down completely randomly.

Pair Corralation between Buckle and Emerson Radio

Considering the 90-day investment horizon Buckle Inc is expected to generate 0.47 times more return on investment than Emerson Radio. However, Buckle Inc is 2.11 times less risky than Emerson Radio. It trades about 0.33 of its potential returns per unit of risk. Emerson Radio is currently generating about 0.03 per unit of risk. If you would invest  3,536  in Buckle Inc on May 6, 2025 and sell it today you would earn a total of  1,387  from holding Buckle Inc or generate 39.23% return on investment over 90 days.

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

Buckle Inc  vs.  Emerson Radio

Buckle Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Buckle Inc are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting forward-looking signals, Buckle exhibited solid returns over the last few months and may actually be approaching a breakup point.

Emerson Radio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Emerson Radio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Emerson Radio may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Buckle and Emerson Radio

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

The idea behind Buckle Inc and Emerson Radio 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.