Correlation Between EMCOR and Virgin Orbit
Can any of the company-specific risk be diversified away by investing in both EMCOR and Virgin Orbit 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 Virgin Orbit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Virgin Orbit Holdings, you can compare the effects of market volatilities on EMCOR and Virgin Orbit 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 Virgin Orbit. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Virgin Orbit.
Diversification Opportunities for EMCOR and Virgin Orbit
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMCOR and Virgin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Virgin Orbit Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Orbit Holdings 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 Virgin Orbit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Orbit Holdings has no effect on the direction of EMCOR i.e., EMCOR and Virgin Orbit go up and down completely randomly.
Pair Corralation between EMCOR and Virgin Orbit
If you would invest 35,843 in EMCOR Group on September 2, 2024 and sell it today you would earn a total of 15,169 from holding EMCOR Group or generate 42.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
EMCOR Group vs. Virgin Orbit Holdings
Performance |
| Timeline |
| EMCOR Group |
| Virgin Orbit Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EMCOR and Virgin Orbit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCOR and Virgin Orbit
The main advantage of trading using opposite EMCOR and Virgin Orbit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Virgin Orbit 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 Virgin Orbit will offset losses from the drop in Virgin Orbit's long position.The idea behind EMCOR Group and Virgin Orbit Holdings 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.| Virgin Orbit vs. EvoAir Holdings | Virgin Orbit vs. BTB Real Estate | Virgin Orbit vs. Mangazeya Mining | Virgin Orbit vs. Guangdong Investment Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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