Correlation Between EMCOR and Advanced Health
Can any of the company-specific risk be diversified away by investing in both EMCOR and Advanced Health 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 Advanced Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Advanced Health Intelligence, you can compare the effects of market volatilities on EMCOR and Advanced Health 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 Advanced Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Advanced Health.
Diversification Opportunities for EMCOR and Advanced Health
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EMCOR and Advanced is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Advanced Health Intelligence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Health Inte 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 Advanced Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Health Inte has no effect on the direction of EMCOR i.e., EMCOR and Advanced Health go up and down completely randomly.
Pair Corralation between EMCOR and Advanced Health
Considering the 90-day investment horizon EMCOR is expected to generate 41.96 times less return on investment than Advanced Health. But when comparing it to its historical volatility, EMCOR Group is 56.1 times less risky than Advanced Health. It trades about 0.16 of its potential returns per unit of risk. Advanced Health Intelligence is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Advanced Health Intelligence on September 1, 2024 and sell it today you would lose (4.60) from holding Advanced Health Intelligence or give up 92.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.41% |
| Values | Daily Returns |
EMCOR Group vs. Advanced Health Intelligence
Performance |
| Timeline |
| EMCOR Group |
| Advanced Health Inte |
EMCOR and Advanced Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Advanced Health
The main advantage of trading using opposite EMCOR and Advanced Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Advanced Health 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 Advanced Health will offset losses from the drop in Advanced Health's long position.The idea behind EMCOR Group and Advanced Health Intelligence 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.| Advanced Health vs. Sphere Entertainment Co | Advanced Health vs. Alvotech | Advanced Health vs. Anterix | Advanced Health vs. Sonida Senior Living |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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