Correlation Between EMCOR and Le@p Technology
Can any of the company-specific risk be diversified away by investing in both EMCOR and Le@p Technology 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 Le@p Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Lep Technology, you can compare the effects of market volatilities on EMCOR and Le@p Technology 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 Le@p Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Le@p Technology.
Diversification Opportunities for EMCOR and Le@p Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMCOR and Le@p is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Lep Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Le@p Technology 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 Le@p Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Le@p Technology has no effect on the direction of EMCOR i.e., EMCOR and Le@p Technology go up and down completely randomly.
Pair Corralation between EMCOR and Le@p Technology
If you would invest 21,558 in EMCOR Group on September 4, 2024 and sell it today you would earn a total of 29,401 from holding EMCOR Group or generate 136.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMCOR Group vs. Lep Technology
Performance |
| Timeline |
| EMCOR Group |
| Le@p Technology |
EMCOR and Le@p Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Le@p Technology
The main advantage of trading using opposite EMCOR and Le@p Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Le@p Technology 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 Le@p Technology will offset losses from the drop in Le@p Technology's long position.The idea behind EMCOR Group and Lep Technology 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.| Le@p Technology vs. KNOT Offshore Partners | Le@p Technology vs. Meiwu Technology Co | Le@p Technology vs. Mid Atlantic Home Health | Le@p Technology vs. Getty Realty |
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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