Correlation Between EMCOR and Bowen Acquisition
Can any of the company-specific risk be diversified away by investing in both EMCOR and Bowen Acquisition 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 Bowen Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Bowen Acquisition Corp, you can compare the effects of market volatilities on EMCOR and Bowen Acquisition 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 Bowen Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Bowen Acquisition.
Diversification Opportunities for EMCOR and Bowen Acquisition
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EMCOR and Bowen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp 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 Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of EMCOR i.e., EMCOR and Bowen Acquisition go up and down completely randomly.
Pair Corralation between EMCOR and Bowen Acquisition
Considering the 90-day investment horizon EMCOR Group is expected to generate 0.83 times more return on investment than Bowen Acquisition. However, EMCOR Group is 1.21 times less risky than Bowen Acquisition. It trades about 0.16 of its potential returns per unit of risk. Bowen Acquisition Corp is currently generating about -0.03 per unit of risk. If you would invest 15,576 in EMCOR Group on October 29, 2024 and sell it today you would earn a total of 37,589 from holding EMCOR Group or generate 241.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.13% |
| Values | Daily Returns |
EMCOR Group vs. Bowen Acquisition Corp
Performance |
| Timeline |
| EMCOR Group |
| Bowen Acquisition Corp |
EMCOR and Bowen Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Bowen Acquisition
The main advantage of trading using opposite EMCOR and Bowen Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Bowen Acquisition 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 Bowen Acquisition will offset losses from the drop in Bowen Acquisition's long position.The idea behind EMCOR Group and Bowen Acquisition Corp 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.| Bowen Acquisition vs. AG Mortgage Investment | Bowen Acquisition vs. Apartment Investment and | Bowen Acquisition vs. Willamette Valley Vineyards | Bowen Acquisition vs. Aegon NV ADR |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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