Correlation Between EMCOR and ACHETER-LOUER
Can any of the company-specific risk be diversified away by investing in both EMCOR and ACHETER-LOUER 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 EMCOR and ACHETER-LOUER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and ACHETER LOUER EO 145612, you can compare the effects of market volatilities on EMCOR and ACHETER-LOUER 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 EMCOR with a short position of ACHETER-LOUER. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and ACHETER-LOUER.
Diversification Opportunities for EMCOR and ACHETER-LOUER
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMCOR and ACHETER-LOUER is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and ACHETER LOUER EO 145612 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACHETER LOUER EO and EMCOR 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 EMCOR Group are associated (or correlated) with ACHETER-LOUER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACHETER LOUER EO has no effect on the direction of EMCOR i.e., EMCOR and ACHETER-LOUER go up and down completely randomly.
Pair Corralation between EMCOR and ACHETER-LOUER
Assuming the 90 days horizon EMCOR Group is expected to generate 0.09 times more return on investment than ACHETER-LOUER. However, EMCOR Group is 11.29 times less risky than ACHETER-LOUER. It trades about -0.3 of its potential returns per unit of risk. ACHETER LOUER EO 145612 is currently generating about -0.08 per unit of risk. If you would invest 48,360 in EMCOR Group on September 25, 2024 and sell it today you would lose (4,220) from holding EMCOR Group or give up 8.73% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
EMCOR Group vs. ACHETER LOUER EO 145612
Performance |
Timeline |
EMCOR Group |
ACHETER LOUER EO |
EMCOR and ACHETER-LOUER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EMCOR and ACHETER-LOUER
The main advantage of trading using opposite EMCOR and ACHETER-LOUER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, ACHETER-LOUER 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 ACHETER-LOUER will offset losses from the drop in ACHETER-LOUER's long position.EMCOR vs. Vinci S A | EMCOR vs. Johnson Controls International | EMCOR vs. Larsen Toubro Limited | EMCOR vs. China Railway Group |
ACHETER-LOUER vs. Publicis Groupe SA | ACHETER-LOUER vs. Omnicom Group | ACHETER-LOUER vs. WPP PLC | ACHETER-LOUER vs. WPP PLC ADR |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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