Correlation Between EMCOR and CureVac NV

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

By analyzing existing cross correlation between EMCOR Group and CureVac NV, you can compare the effects of market volatilities on EMCOR and CureVac NV 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 CureVac NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and CureVac NV.

Diversification Opportunities for EMCOR and CureVac NV

0.6

Correlation Coefficient

EMCOR  CureVac NV

Poor diversification

The 3 months correlation between EMCOR and CureVac is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of EMCOR i.e., EMCOR and CureVac NV go up and down completely randomly.

Pair Corralation between EMCOR and CureVac NV

Considering the 90-day investment horizon EMCOR Group is expected to under-perform the CureVac NV. But the stock apears to be less risky and, when comparing its historical volatility, EMCOR Group is 1.35 times less risky than CureVac NV. The stock trades about -0.04 of its potential returns per unit of risk. The CureVac NV is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  305.00  in CureVac NV on December 25, 2024 and sell it today you would lose (16.00) from holding CureVac NV or give up 5.25% of portfolio value over 90 days.

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

EMCOR Group  vs.  CureVac NV

EMCOR Group

Risk-Adjusted Performance

Very Weak

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

CureVac NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days CureVac NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CureVac NV is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EMCOR and CureVac NV

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

The idea behind EMCOR Group and CureVac NV 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.