Correlation Between EMCOR and Jupiter Marine

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

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

Diversification Opportunities for EMCOR and Jupiter Marine

0.0

Correlation Coefficient

EMCOR  Jupiter Marine

Pay attention - limited upside

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

Pair Corralation between EMCOR and Jupiter Marine

Considering the 90-day investment horizon EMCOR is expected to generate 10.02 times less return on investment than Jupiter Marine. But when comparing it to its historical volatility, EMCOR Group is 28.6 times less risky than Jupiter Marine. It trades about 0.16 of its potential returns per unit of risk. Jupiter Marine International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Jupiter Marine International on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Jupiter Marine International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

EMCOR Group  vs.  Jupiter Marine International

EMCOR Group

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, EMCOR is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Jupiter Marine Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Marine International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Jupiter Marine is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with EMCOR and Jupiter Marine

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

The idea behind EMCOR Group and Jupiter Marine International 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..