Correlation Between Deluxe and Emerald Expositions

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

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

Diversification Opportunities for Deluxe and Emerald Expositions

0.8

Correlation Coefficient

Deluxe  Emerald Expositions

Very poor diversification

The 3 months correlation between Deluxe and Emerald is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Emerald Expositions Events in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Expositions and Deluxe 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 Deluxe 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 Deluxe i.e., Deluxe and Emerald Expositions go up and down completely randomly.

Pair Corralation between Deluxe and Emerald Expositions

Considering the 90-day investment horizon Deluxe is expected to generate 1.15 times more return on investment than Emerald Expositions. However, Deluxe is 1.15 times more volatile than Emerald Expositions Events. It trades about 0.04 of its potential returns per unit of risk. Emerald Expositions Events is currently generating about 0.04 per unit of risk. If you would invest  1,494  in Deluxe on May 6, 2025 and sell it today you would earn a total of  65.00  from holding Deluxe or generate 4.35% return on investment over 90 days.

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

Deluxe  vs.  Emerald Expositions Events

Deluxe

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Deluxe are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Deluxe is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Emerald Expositions

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Emerald Expositions Events are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Emerald Expositions is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Deluxe and Emerald Expositions

The main advantage of trading using opposite Deluxe and Emerald Expositions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe 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 Deluxe 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.