Correlation Between Bowhead Specialty and EMCOR
Can any of the company-specific risk be diversified away by investing in both Bowhead Specialty 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 Bowhead Specialty and EMCOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowhead Specialty Holdings and EMCOR Group, you can compare the effects of market volatilities on Bowhead Specialty 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 Bowhead Specialty with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and EMCOR.
Diversification Opportunities for Bowhead Specialty and EMCOR
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bowhead and EMCOR is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and Bowhead Specialty 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 Bowhead Specialty Holdings 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 Bowhead Specialty i.e., Bowhead Specialty and EMCOR go up and down completely randomly.
Pair Corralation between Bowhead Specialty and EMCOR
Considering the 90-day investment horizon Bowhead Specialty is expected to generate 1.24 times less return on investment than EMCOR. In addition to that, Bowhead Specialty is 1.06 times more volatile than EMCOR Group. It trades about 0.09 of its total potential returns per unit of risk. EMCOR Group is currently generating about 0.12 per unit of volatility. If you would invest 14,635 in EMCOR Group on November 2, 2024 and sell it today you would earn a total of 30,670 from holding EMCOR Group or generate 209.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 35.09% |
| Values | Daily Returns |
Bowhead Specialty Holdings vs. EMCOR Group
Performance |
| Timeline |
| Bowhead Specialty |
| EMCOR Group |
Bowhead Specialty and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowhead Specialty and EMCOR
The main advantage of trading using opposite Bowhead Specialty and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowhead Specialty 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.| Bowhead Specialty vs. American Environmental | Bowhead Specialty vs. HUHUTECH International Group | Bowhead Specialty vs. United States Steel | Bowhead Specialty vs. Nippon Steel Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |