Correlation Between Strauss and E M

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

By analyzing existing cross correlation between Strauss Group and E M Computing, you can compare the effects of market volatilities on Strauss and E M 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 Strauss with a short position of E M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strauss and E M.

Diversification Opportunities for Strauss and E M

-0.34

Correlation Coefficient

Strauss  E M

Very good diversification

The 3 months correlation between Strauss and EMCO is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and E M Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E M Computing and Strauss 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 Strauss Group are associated (or correlated) with E M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E M Computing has no effect on the direction of Strauss i.e., Strauss and E M go up and down completely randomly.

Pair Corralation between Strauss and E M

Assuming the 90 days trading horizon Strauss Group is expected to generate 0.5 times more return on investment than E M. However, Strauss Group is 2.01 times less risky than E M. It trades about 0.12 of its potential returns per unit of risk. E M Computing is currently generating about -0.03 per unit of risk. If you would invest  855,700  in Strauss Group on May 7, 2025 and sell it today you would earn a total of  64,600  from holding Strauss Group or generate 7.55% return on investment over 90 days.

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

Strauss Group  vs.  E M Computing

Strauss Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strauss Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Strauss may actually be approaching a critical reversion point that can send shares even higher in September 2025.

E M Computing

Risk-Adjusted Performance

Very Weak

Over the last 90 days E M Computing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E M is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strauss and E M

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

The idea behind Strauss Group and E M Computing 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.