Correlation Between Brockhaus Capital and EMCOR

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Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital and EMCOR 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 Brockhaus Capital and EMCOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and EMCOR Group, you can compare the effects of market volatilities on Brockhaus Capital and EMCOR 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 Brockhaus Capital with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and EMCOR.

Diversification Opportunities for Brockhaus Capital and EMCOR

-0.81
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Brockhaus and EMCOR is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with EMCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCOR Group has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and EMCOR go up and down completely randomly.

Pair Corralation between Brockhaus Capital and EMCOR

Assuming the 90 days trading horizon Brockhaus Capital Management is expected to generate 2.36 times more return on investment than EMCOR. However, Brockhaus Capital is 2.36 times more volatile than EMCOR Group. It trades about 0.07 of its potential returns per unit of risk. EMCOR Group is currently generating about -0.39 per unit of risk. If you would invest  2,300  in Brockhaus Capital Management on September 27, 2024 and sell it today you would earn a total of  90.00  from holding Brockhaus Capital Management or generate 3.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Brockhaus Capital Management  vs.  EMCOR Group

 Performance 
       Timeline  
Brockhaus Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Brockhaus Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
EMCOR Group 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, EMCOR reported solid returns over the last few months and may actually be approaching a breakup point.

Brockhaus Capital and EMCOR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brockhaus Capital and EMCOR

The main advantage of trading using opposite Brockhaus Capital and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital position performs unexpectedly, EMCOR 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 EMCOR will offset losses from the drop in EMCOR's long position.
The idea behind Brockhaus Capital Management and EMCOR Group 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.

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