Correlation Between EMCOR and Ascent Solar
Can any of the company-specific risk be diversified away by investing in both EMCOR and Ascent Solar 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 Ascent Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Ascent Solar Technologies,, you can compare the effects of market volatilities on EMCOR and Ascent Solar 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 Ascent Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Ascent Solar.
Diversification Opportunities for EMCOR and Ascent Solar
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between EMCOR and Ascent is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Ascent Solar Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technol 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 Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technol has no effect on the direction of EMCOR i.e., EMCOR and Ascent Solar go up and down completely randomly.
Pair Corralation between EMCOR and Ascent Solar
Considering the 90-day investment horizon EMCOR Group is expected to generate 0.19 times more return on investment than Ascent Solar. However, EMCOR Group is 5.18 times less risky than Ascent Solar. It trades about 0.17 of its potential returns per unit of risk. Ascent Solar Technologies, is currently generating about -0.14 per unit of risk. If you would invest 17,392 in EMCOR Group on September 4, 2024 and sell it today you would earn a total of 33,117 from holding EMCOR Group or generate 190.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMCOR Group vs. Ascent Solar Technologies,
Performance |
| Timeline |
| EMCOR Group |
| Ascent Solar Technol |
EMCOR and Ascent Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Ascent Solar
The main advantage of trading using opposite EMCOR and Ascent Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Ascent Solar 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 Ascent Solar will offset losses from the drop in Ascent Solar's long position.The idea behind EMCOR Group and Ascent Solar Technologies, 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.| Ascent Solar vs. ServiceNow | Ascent Solar vs. Supercom | Ascent Solar vs. CDW Corp | Ascent Solar vs. FiscalNote Holdings |
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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