Correlation Between Ameresco and EMCOR
Can any of the company-specific risk be diversified away by investing in both Ameresco and EMCOR 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 Ameresco and EMCOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameresco and EMCOR Group, you can compare the effects of market volatilities on Ameresco and EMCOR 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 Ameresco with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameresco and EMCOR.
Diversification Opportunities for Ameresco and EMCOR
Very good diversification
The 3 months correlation between Ameresco and EMCOR is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ameresco and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and Ameresco 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 Ameresco are associated (or correlated) with EMCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCOR Group has no effect on the direction of Ameresco i.e., Ameresco and EMCOR go up and down completely randomly.
Pair Corralation between Ameresco and EMCOR
Given the investment horizon of 90 days Ameresco is expected to generate 1.87 times less return on investment than EMCOR. In addition to that, Ameresco is 2.34 times more volatile than EMCOR Group. It trades about 0.06 of its total potential returns per unit of risk. EMCOR Group is currently generating about 0.25 per unit of volatility. If you would invest 46,559 in EMCOR Group on October 21, 2024 and sell it today you would earn a total of 4,088 from holding EMCOR Group or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameresco vs. EMCOR Group
Performance |
| Timeline |
| Ameresco |
| EMCOR Group |
Ameresco and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameresco and EMCOR
The main advantage of trading using opposite Ameresco and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameresco position performs unexpectedly, EMCOR 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 EMCOR will offset losses from the drop in EMCOR's long position.| Ameresco vs. TPI Composites | Ameresco vs. Hannon Armstrong Sustainable | Ameresco vs. Atkore International Group | Ameresco vs. Daqo New Energy |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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