Correlation Between EMCOR and Getty Copper

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

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

Diversification Opportunities for EMCOR and Getty Copper

0.0

Correlation Coefficient

EMCOR  Getty Copper

Pay attention - limited upside

The 3 months correlation between EMCOR and Getty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper 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 Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of EMCOR i.e., EMCOR and Getty Copper go up and down completely randomly.

Pair Corralation between EMCOR and Getty Copper

If you would invest  39,620  in EMCOR Group on September 13, 2024 and sell it today you would earn a total of  8,442  from holding EMCOR Group or generate 21.31% return on investment over 90 days.

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

EMCOR Group  vs.  Getty Copper

EMCOR Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish primary indicators, EMCOR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Getty Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Getty Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EMCOR and Getty Copper

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

The idea behind EMCOR Group and Getty Copper 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.