Correlation Between EMCOR and Evofem Biosciences
Can any of the company-specific risk be diversified away by investing in both EMCOR and Evofem Biosciences 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 Evofem Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Evofem Biosciences, you can compare the effects of market volatilities on EMCOR and Evofem Biosciences 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 Evofem Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Evofem Biosciences.
Diversification Opportunities for EMCOR and Evofem Biosciences
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMCOR and Evofem is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences 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 Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of EMCOR i.e., EMCOR and Evofem Biosciences go up and down completely randomly.
Pair Corralation between EMCOR and Evofem Biosciences
If you would invest 37,265 in EMCOR Group on September 1, 2024 and sell it today you would earn a total of 13,747 from holding EMCOR Group or generate 36.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
EMCOR Group vs. Evofem Biosciences
Performance |
| Timeline |
| EMCOR Group |
| Evofem Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EMCOR and Evofem Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Evofem Biosciences
The main advantage of trading using opposite EMCOR and Evofem Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Evofem Biosciences 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 Evofem Biosciences will offset losses from the drop in Evofem Biosciences' long position.The idea behind EMCOR Group and Evofem Biosciences 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.| Evofem Biosciences vs. Gentex | Evofem Biosciences vs. Magna International | Evofem Biosciences vs. PACCAR Inc | Evofem Biosciences vs. Aeye Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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