Correlation Between SOUTHERN and EMCOR
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and EMCOR Group, you can compare the effects of market volatilities on SOUTHERN 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 SOUTHERN with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and EMCOR.
Diversification Opportunities for SOUTHERN and EMCOR
Pay attention - limited upside
The 3 months correlation between SOUTHERN and EMCOR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and SOUTHERN 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 SOUTHERN CALIF EDISON 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 SOUTHERN i.e., SOUTHERN and EMCOR go up and down completely randomly.
Pair Corralation between SOUTHERN and EMCOR
If you would invest 46,326 in EMCOR Group on October 25, 2024 and sell it today you would earn a total of 7,273 from holding EMCOR Group or generate 15.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. EMCOR Group
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EMCOR Group |
SOUTHERN and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and EMCOR
The main advantage of trading using opposite SOUTHERN and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN 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.The idea behind SOUTHERN CALIF EDISON and EMCOR Group 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.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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