Correlation Between EMCOR and Great Lakes
Can any of the company-specific risk be diversified away by investing in both EMCOR and Great Lakes 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 Great Lakes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Great Lakes Dredge, you can compare the effects of market volatilities on EMCOR and Great Lakes 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 Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Great Lakes.
Diversification Opportunities for EMCOR and Great Lakes
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EMCOR and Great is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Great Lakes Dredge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Dredge 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 Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Dredge has no effect on the direction of EMCOR i.e., EMCOR and Great Lakes go up and down completely randomly.
Pair Corralation between EMCOR and Great Lakes
Considering the 90-day investment horizon EMCOR is expected to generate 1.01 times less return on investment than Great Lakes. But when comparing it to its historical volatility, EMCOR Group is 1.11 times less risky than Great Lakes. It trades about 0.12 of its potential returns per unit of risk. Great Lakes Dredge is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 923.00 in Great Lakes Dredge on August 24, 2024 and sell it today you would earn a total of 309.00 from holding Great Lakes Dredge or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMCOR Group vs. Great Lakes Dredge
Performance |
| Timeline |
| EMCOR Group |
| Great Lakes Dredge |
EMCOR and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Great Lakes
The main advantage of trading using opposite EMCOR and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.| EMCOR vs. Jacobs Solutions | EMCOR vs. Dycom Industries | EMCOR vs. Innovate Corp | EMCOR vs. Energy Services |
| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |