Correlation Between EMCOR and Molina
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By analyzing existing cross correlation between EMCOR Group and Molina Healthcare 4375, you can compare the effects of market volatilities on EMCOR and Molina 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 Molina. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Molina.
Diversification Opportunities for EMCOR and Molina
Excellent diversification
The 3 months correlation between EMCOR and Molina is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Molina Healthcare 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare 4375 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 Molina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molina Healthcare 4375 has no effect on the direction of EMCOR i.e., EMCOR and Molina go up and down completely randomly.
Pair Corralation between EMCOR and Molina
Considering the 90-day investment horizon EMCOR Group is expected to generate 3.97 times more return on investment than Molina. However, EMCOR is 3.97 times more volatile than Molina Healthcare 4375. It trades about 0.14 of its potential returns per unit of risk. Molina Healthcare 4375 is currently generating about 0.02 per unit of risk. If you would invest 14,922 in EMCOR Group on September 3, 2024 and sell it today you would earn a total of 36,090 from holding EMCOR Group or generate 241.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.96% |
| Values | Daily Returns |
EMCOR Group vs. Molina Healthcare 4375
Performance |
| Timeline |
| EMCOR Group |
| Molina Healthcare 4375 |
EMCOR and Molina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Molina
The main advantage of trading using opposite EMCOR and Molina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Molina 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 Molina will offset losses from the drop in Molina's long position.The idea behind EMCOR Group and Molina Healthcare 4375 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.| Molina vs. ArcelorMittal SA ADR | Molina vs. Alaska Air Group | Molina vs. Titan International | Molina vs. Insteel Industries |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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