Correlation Between EMCOR and HelloFresh
Can any of the company-specific risk be diversified away by investing in both EMCOR and HelloFresh 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 HelloFresh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and HelloFresh SE, you can compare the effects of market volatilities on EMCOR and HelloFresh 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 HelloFresh. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and HelloFresh.
Diversification Opportunities for EMCOR and HelloFresh
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMCOR and HelloFresh is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and HelloFresh SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HelloFresh SE 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 HelloFresh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HelloFresh SE has no effect on the direction of EMCOR i.e., EMCOR and HelloFresh go up and down completely randomly.
Pair Corralation between EMCOR and HelloFresh
Considering the 90-day investment horizon EMCOR Group is expected to generate 0.29 times more return on investment than HelloFresh. However, EMCOR Group is 3.44 times less risky than HelloFresh. It trades about 0.34 of its potential returns per unit of risk. HelloFresh SE is currently generating about 0.04 per unit of risk. If you would invest 43,679 in EMCOR Group on August 30, 2024 and sell it today you would earn a total of 7,116 from holding EMCOR Group or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
EMCOR Group vs. HelloFresh SE
Performance |
| Timeline |
| EMCOR Group |
| HelloFresh SE |
EMCOR and HelloFresh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and HelloFresh
The main advantage of trading using opposite EMCOR and HelloFresh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, HelloFresh 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 HelloFresh will offset losses from the drop in HelloFresh's long position.The idea behind EMCOR Group and HelloFresh SE 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.| HelloFresh vs. Biglari Holdings | HelloFresh vs. Potbelly Co | HelloFresh vs. Restaurant Brands International | HelloFresh vs. Red Robin Gourmet |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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