Correlation Between EMCOR and TRANSCANADA
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By analyzing existing cross correlation between EMCOR Group and TRANSCANADA PIPELINES LTD, you can compare the effects of market volatilities on EMCOR and TRANSCANADA 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 TRANSCANADA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and TRANSCANADA.
Diversification Opportunities for EMCOR and TRANSCANADA
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between EMCOR and TRANSCANADA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and TRANSCANADA PIPELINES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSCANADA PIPELINES LTD 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 TRANSCANADA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSCANADA PIPELINES LTD has no effect on the direction of EMCOR i.e., EMCOR and TRANSCANADA go up and down completely randomly.
Pair Corralation between EMCOR and TRANSCANADA
Considering the 90-day investment horizon EMCOR Group is expected to generate 2.17 times more return on investment than TRANSCANADA. However, EMCOR is 2.17 times more volatile than TRANSCANADA PIPELINES LTD. It trades about 0.09 of its potential returns per unit of risk. TRANSCANADA PIPELINES LTD is currently generating about 0.0 per unit of risk. If you would invest 16,552 in EMCOR Group on January 25, 2025 and sell it today you would earn a total of 23,510 from holding EMCOR Group or generate 142.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.77% |
| Values | Daily Returns |
EMCOR Group vs. TRANSCANADA PIPELINES LTD
Performance |
| Timeline |
| EMCOR Group |
| TRANSCANADA PIPELINES LTD |
EMCOR and TRANSCANADA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and TRANSCANADA
The main advantage of trading using opposite EMCOR and TRANSCANADA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, TRANSCANADA 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 TRANSCANADA will offset losses from the drop in TRANSCANADA's long position.The idea behind EMCOR Group and TRANSCANADA PIPELINES LTD 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.| TRANSCANADA vs. AEP TEX INC | TRANSCANADA vs. KDDI Corp | TRANSCANADA vs. Clever Leaves Holdings | TRANSCANADA vs. Restaurant Brands International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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