Correlation Between EMCOR and QT Imaging

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

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

Diversification Opportunities for EMCOR and QT Imaging

0.2

Correlation Coefficient

EMCOR  QT Imaging

Modest diversification

The 3 months correlation between EMCOR and QTI is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and QT Imaging Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QT Imaging 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 QT Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QT Imaging Holdings has no effect on the direction of EMCOR i.e., EMCOR and QT Imaging go up and down completely randomly.

Pair Corralation between EMCOR and QT Imaging

Considering the 90-day investment horizon EMCOR Group is expected to under-perform the QT Imaging. But the stock apears to be less risky and, when comparing its historical volatility, EMCOR Group is 3.72 times less risky than QT Imaging. The stock trades about -0.08 of its potential returns per unit of risk. The QT Imaging Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  44.00  in QT Imaging Holdings on December 17, 2024 and sell it today you would earn a total of  19.00  from holding QT Imaging Holdings or generate 43.18% return on investment over 90 days.

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

EMCOR Group  vs.  QT Imaging Holdings

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 fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

QT Imaging Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QT Imaging Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, QT Imaging demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMCOR and QT Imaging

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

The idea behind EMCOR Group and QT Imaging 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.