Correlation Between EMPEROR ENT and Federal Home

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

By analyzing existing cross correlation between EMPEROR ENT HOTEL and Federal Home Loan, you can compare the effects of market volatilities on EMPEROR ENT and Federal Home 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 EMPEROR ENT with a short position of Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMPEROR ENT and Federal Home.

Diversification Opportunities for EMPEROR ENT and Federal Home

0.17

Correlation Coefficient

EMPEROR ENT  Federal Home

Average diversification

The 3 months correlation between EMPEROR and Federal is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding EMPEROR ENT HOTEL and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan and EMPEROR ENT 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 EMPEROR ENT HOTEL are associated (or correlated) with Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of EMPEROR ENT i.e., EMPEROR ENT and Federal Home go up and down completely randomly.

Pair Corralation between EMPEROR ENT and Federal Home

Assuming the 90 days trading horizon EMPEROR ENT HOTEL is expected to under-perform the Federal Home. But the stock apears to be less risky and, when comparing its historical volatility, EMPEROR ENT HOTEL is 2.09 times less risky than Federal Home. The stock trades about -0.05 of its potential returns per unit of risk. The Federal Home Loan is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  478.00  in Federal Home Loan on April 9, 2025 and sell it today you would earn a total of  197.00  from holding Federal Home Loan or generate 41.21% return on investment over 90 days.

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

EMPEROR ENT HOTEL  vs.  Federal Home Loan

EMPEROR ENT HOTEL

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMPEROR ENT HOTEL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Federal Home Loan

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Home Loan are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Federal Home reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMPEROR ENT and Federal Home

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

The idea behind EMPEROR ENT HOTEL and Federal Home Loan 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.