Correlation Between EMCOR and Primega Group

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

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

Diversification Opportunities for EMCOR and Primega Group

0.0

Correlation Coefficient

EMCOR  Primega Group

Pay attention - limited upside

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

Pair Corralation between EMCOR and Primega Group

Considering the 90-day investment horizon EMCOR Group is expected to generate 0.32 times more return on investment than Primega Group. However, EMCOR Group is 3.14 times less risky than Primega Group. It trades about 0.37 of its potential returns per unit of risk. Primega Group Holdings is currently generating about -0.09 per unit of risk. If you would invest  46,303  in EMCOR Group on October 24, 2024 and sell it today you would earn a total of  6,413  from holding EMCOR Group or generate 13.85% return on investment over 90 days.

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

EMCOR Group  vs.  Primega Group Holdings

EMCOR Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, EMCOR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Primega Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Primega Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical indicators, Primega Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMCOR and Primega Group

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

The idea behind EMCOR Group and Primega Group Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.