Correlation Between EMCOR and Keurig Dr
Can any of the company-specific risk be diversified away by investing in both EMCOR and Keurig Dr 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 Keurig Dr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Keurig Dr Pepper, you can compare the effects of market volatilities on EMCOR and Keurig Dr 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 Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Keurig Dr.
Diversification Opportunities for EMCOR and Keurig Dr
Pay attention - limited upside
The 3 months correlation between EMCOR and Keurig is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper 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 Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of EMCOR i.e., EMCOR and Keurig Dr go up and down completely randomly.
Pair Corralation between EMCOR and Keurig Dr
Considering the 90-day investment horizon EMCOR Group is expected to generate 1.49 times more return on investment than Keurig Dr. However, EMCOR is 1.49 times more volatile than Keurig Dr Pepper. It trades about 0.22 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about -0.01 per unit of risk. If you would invest 46,150 in EMCOR Group on September 4, 2024 and sell it today you would earn a total of 4,359 from holding EMCOR Group or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMCOR Group vs. Keurig Dr Pepper
Performance |
| Timeline |
| EMCOR Group |
| Keurig Dr Pepper |
EMCOR and Keurig Dr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Keurig Dr
The main advantage of trading using opposite EMCOR and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Keurig Dr 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 Keurig Dr will offset losses from the drop in Keurig Dr's long position.The idea behind EMCOR Group and Keurig Dr Pepper 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.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |