Correlation Between EMCOR and Aenza SAA
Can any of the company-specific risk be diversified away by investing in both EMCOR and Aenza SAA 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 Aenza SAA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Aenza SAA, you can compare the effects of market volatilities on EMCOR and Aenza SAA 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 Aenza SAA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Aenza SAA.
Diversification Opportunities for EMCOR and Aenza SAA
Pay attention - limited upside
The 3 months correlation between EMCOR and Aenza is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Aenza SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aenza SAA 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 Aenza SAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aenza SAA has no effect on the direction of EMCOR i.e., EMCOR and Aenza SAA go up and down completely randomly.
Pair Corralation between EMCOR and Aenza SAA
Considering the 90-day investment horizon EMCOR Group is expected to generate 0.47 times more return on investment than Aenza SAA. However, EMCOR Group is 2.12 times less risky than Aenza SAA. It trades about 0.12 of its potential returns per unit of risk. Aenza SAA is currently generating about -0.08 per unit of risk. If you would invest 14,610 in EMCOR Group on November 5, 2024 and sell it today you would earn a total of 30,196 from holding EMCOR Group or generate 206.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.42% |
| Values | Daily Returns |
EMCOR Group vs. Aenza SAA
Performance |
| Timeline |
| EMCOR Group |
| Aenza SAA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EMCOR and Aenza SAA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Aenza SAA
The main advantage of trading using opposite EMCOR and Aenza SAA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Aenza SAA 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 Aenza SAA will offset losses from the drop in Aenza SAA's long position.The idea behind EMCOR Group and Aenza SAA 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.| Aenza SAA vs. Bowman Consulting Group | Aenza SAA vs. Api Group Corp | Aenza SAA vs. ACS Actividades de | Aenza SAA vs. ACS Actividades De |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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