Correlation Between EMCOR and Nano Mobile
Can any of the company-specific risk be diversified away by investing in both EMCOR and Nano Mobile 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 Nano Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Nano Mobile Healthcare, you can compare the effects of market volatilities on EMCOR and Nano Mobile 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 Nano Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Nano Mobile.
Diversification Opportunities for EMCOR and Nano Mobile
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between EMCOR and Nano is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Nano Mobile Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Mobile Healthcare 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 Nano Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Mobile Healthcare has no effect on the direction of EMCOR i.e., EMCOR and Nano Mobile go up and down completely randomly.
Pair Corralation between EMCOR and Nano Mobile
Considering the 90-day investment horizon EMCOR is expected to generate 6.21 times less return on investment than Nano Mobile. But when comparing it to its historical volatility, EMCOR Group is 11.66 times less risky than Nano Mobile. It trades about 0.15 of its potential returns per unit of risk. Nano Mobile Healthcare is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Nano Mobile Healthcare on September 3, 2024 and sell it today you would lose (0.08) from holding Nano Mobile Healthcare or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMCOR Group vs. Nano Mobile Healthcare
Performance |
| Timeline |
| EMCOR Group |
| Nano Mobile Healthcare |
EMCOR and Nano Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Nano Mobile
The main advantage of trading using opposite EMCOR and Nano Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Nano Mobile 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 Nano Mobile will offset losses from the drop in Nano Mobile's long position.The idea behind EMCOR Group and Nano Mobile Healthcare 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.| Nano Mobile vs. Zoom Video Communications | Nano Mobile vs. NetEase | Nano Mobile vs. Universal Music Group | Nano Mobile vs. BCB Bancorp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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