Correlation Between Uber Technologies and EMCOR
Can any of the company-specific risk be diversified away by investing in both Uber Technologies 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 Uber Technologies and EMCOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and EMCOR Group, you can compare the effects of market volatilities on Uber Technologies 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 Uber Technologies with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and EMCOR.
Diversification Opportunities for Uber Technologies and EMCOR
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uber and EMCOR is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and Uber Technologies 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 Uber Technologies 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 Uber Technologies i.e., Uber Technologies and EMCOR go up and down completely randomly.
Pair Corralation between Uber Technologies and EMCOR
Given the investment horizon of 90 days Uber Technologies is expected to under-perform the EMCOR. In addition to that, Uber Technologies is 1.19 times more volatile than EMCOR Group. It trades about -0.01 of its total potential returns per unit of risk. EMCOR Group is currently generating about 0.14 per unit of volatility. If you would invest 31,292 in EMCOR Group on August 27, 2024 and sell it today you would earn a total of 19,200 from holding EMCOR Group or generate 61.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. EMCOR Group
Performance |
| Timeline |
| Uber Technologies |
| EMCOR Group |
Uber Technologies and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and EMCOR
The main advantage of trading using opposite Uber Technologies and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies 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.| Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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