Correlation Between Shimmick Common and EMCOR
Can any of the company-specific risk be diversified away by investing in both Shimmick Common and EMCOR 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 Shimmick Common and EMCOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimmick Common and EMCOR Group, you can compare the effects of market volatilities on Shimmick Common and EMCOR 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 Shimmick Common with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimmick Common and EMCOR.
Diversification Opportunities for Shimmick Common and EMCOR
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shimmick and EMCOR is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shimmick Common and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and Shimmick Common 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 Shimmick Common are associated (or correlated) with EMCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCOR Group has no effect on the direction of Shimmick Common i.e., Shimmick Common and EMCOR go up and down completely randomly.
Pair Corralation between Shimmick Common and EMCOR
Given the investment horizon of 90 days Shimmick Common is expected to under-perform the EMCOR. In addition to that, Shimmick Common is 4.44 times more volatile than EMCOR Group. It trades about 0.0 of its total potential returns per unit of risk. EMCOR Group is currently generating about 0.19 per unit of volatility. If you would invest 21,186 in EMCOR Group on September 2, 2024 and sell it today you would earn a total of 29,826 from holding EMCOR Group or generate 140.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shimmick Common vs. EMCOR Group
Performance |
| Timeline |
| Shimmick Common |
| EMCOR Group |
Shimmick Common and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimmick Common and EMCOR
The main advantage of trading using opposite Shimmick Common and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimmick Common position performs unexpectedly, EMCOR 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 EMCOR will offset losses from the drop in EMCOR's long position.| Shimmick Common vs. Magna International | Shimmick Common vs. Rivian Automotive | Shimmick Common vs. Li Auto | Shimmick Common vs. Modine Manufacturing |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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