Correlation Between EMCOR and TravelCenters
Can any of the company-specific risk be diversified away by investing in both EMCOR and TravelCenters 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 TravelCenters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and TravelCenters Of America, you can compare the effects of market volatilities on EMCOR and TravelCenters 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 TravelCenters. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and TravelCenters.
Diversification Opportunities for EMCOR and TravelCenters
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMCOR and TravelCenters is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and TravelCenters Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TravelCenters Of America 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 TravelCenters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TravelCenters Of America has no effect on the direction of EMCOR i.e., EMCOR and TravelCenters go up and down completely randomly.
Pair Corralation between EMCOR and TravelCenters
If you would invest (100.00) in TravelCenters Of America on November 28, 2024 and sell it today you would earn a total of 100.00 from holding TravelCenters Of America or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
EMCOR Group vs. TravelCenters Of America
Performance |
| Timeline |
| EMCOR Group |
| TravelCenters Of America |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
EMCOR and TravelCenters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and TravelCenters
The main advantage of trading using opposite EMCOR and TravelCenters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, TravelCenters 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 TravelCenters will offset losses from the drop in TravelCenters' long position.The idea behind EMCOR Group and TravelCenters Of America 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.| TravelCenters vs. B Riley Financial | TravelCenters vs. Sotherly Hotels Series | TravelCenters vs. B Riley Financial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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