Correlation Between EMCORE and Advanced Micro

By analyzing existing cross correlation between EMCORE and Advanced Micro Devices you can compare the effects of market volatilities on EMCORE and Advanced Micro 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 EMCORE with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCORE and Advanced Micro.

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Can any of the company-specific risk be diversified away by investing in both EMCORE and Advanced Micro at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing EMCORE and Advanced Micro into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for EMCORE and Advanced Micro

0.76
Correlation
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Poor diversification

The 3 months correlation between EMCORE and Advanced is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding EMCORE Corp. and Advanced Micro Devices Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and EMCORE 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 EMCORE are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of EMCORE i.e. EMCORE and Advanced Micro go up and down completely randomly.

Pair Corralation between EMCORE and Advanced Micro

Given the investment horizon of 30 days, EMCORE is expected to generate 1.42 times more return on investment than Advanced Micro. However, EMCORE is 1.42 times more volatile than Advanced Micro Devices. It trades about 0.1 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.09 per unit of risk. If you would invest  240.00  in EMCORE on May 7, 2020 and sell it today you would earn a total of  76.00  from holding EMCORE or generate 31.67% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

EMCORE Corp.  vs.  Advanced Micro Devices Inc

 Performance (%) 
      Timeline 
EMCORE 
66

EMCORE Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in EMCORE are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. In defiance of relatively unsteady forward-looking signals, EMCORE reported solid returns over the last few months and may actually be approaching a breakup point.
Advanced Micro Devices 
66

Advanced Micro Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. In spite of rather unsteady fundamental drivers, Advanced Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

EMCORE and Advanced Micro Volatility Contrast

 Predicted Return Density 
      Returns 
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