Correlation Between Smithfield Foods, and Emerson Radio

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

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

Diversification Opportunities for Smithfield Foods, and Emerson Radio

-0.16

Correlation Coefficient

Smithfield Foods,  Emerson Radio

Good diversification

The 3 months correlation between Smithfield and Emerson is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Smithfield Foods, Common and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio and Smithfield Foods, 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 Smithfield Foods, Common 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 Smithfield Foods, i.e., Smithfield Foods, and Emerson Radio go up and down completely randomly.

Pair Corralation between Smithfield Foods, and Emerson Radio

Considering the 90-day investment horizon Smithfield Foods, Common is expected to generate 0.33 times more return on investment than Emerson Radio. However, Smithfield Foods, Common is 3.07 times less risky than Emerson Radio. It trades about 0.15 of its potential returns per unit of risk. Emerson Radio is currently generating about 0.03 per unit of risk. If you would invest  2,202  in Smithfield Foods, Common on May 6, 2025 and sell it today you would earn a total of  230.00  from holding Smithfield Foods, Common or generate 10.45% return on investment over 90 days.

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

Smithfield Foods, Common  vs.  Emerson Radio

Smithfield Foods, Common

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smithfield Foods, Common are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Smithfield Foods, may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 Smithfield Foods, and Emerson Radio

The main advantage of trading using opposite Smithfield Foods, and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smithfield Foods, 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 Smithfield Foods, Common 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.