Correlation Between AETNA and EMCOR
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By analyzing existing cross correlation between AETNA INC NEW and EMCOR Group, you can compare the effects of market volatilities on AETNA 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 AETNA with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AETNA and EMCOR.
Diversification Opportunities for AETNA and EMCOR
Significant diversification
The 3 months correlation between AETNA and EMCOR is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding AETNA INC NEW and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and AETNA 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 AETNA INC NEW 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 AETNA i.e., AETNA and EMCOR go up and down completely randomly.
Pair Corralation between AETNA and EMCOR
Assuming the 90 days trading horizon AETNA INC NEW is expected to under-perform the EMCOR. But the bond apears to be less risky and, when comparing its historical volatility, AETNA INC NEW is 1.59 times less risky than EMCOR. The bond trades about -0.07 of its potential returns per unit of risk. The EMCOR Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 35,843 in EMCOR Group on August 31, 2024 and sell it today you would earn a total of 14,952 from holding EMCOR Group or generate 41.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.25% |
| Values | Daily Returns |
AETNA INC NEW vs. EMCOR Group
Performance |
| Timeline |
| AETNA INC NEW |
| EMCOR Group |
AETNA and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AETNA and EMCOR
The main advantage of trading using opposite AETNA and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AETNA 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.| AETNA vs. MGIC Investment Corp | AETNA vs. Perseus Mining Limited | AETNA vs. Western Sierra Mining | AETNA vs. Paiute Oil Mining |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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