Correlation Between EMCOR and Empire Global

Can any of the company-specific risk be diversified away by investing in both EMCOR and Empire Global 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 Empire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EMCOR Group and Empire Global Gaming, you can compare the effects of market volatilities on EMCOR and Empire Global 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 Empire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Empire Global.

Diversification Opportunities for EMCOR and Empire Global

0.0

Correlation Coefficient

EMCOR  Empire Global

Pay attention - limited upside

The 3 months correlation between EMCOR and Empire is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Empire Global Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Global Gaming 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 Empire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Global Gaming has no effect on the direction of EMCOR i.e., EMCOR and Empire Global go up and down completely randomly.

Pair Corralation between EMCOR and Empire Global

If you would invest  35,462  in EMCOR Group on January 29, 2024 and sell it today you would lose (60.00) from holding EMCOR Group or give up 0.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EMCOR Group  vs.  Empire Global Gaming

EMCOR Group

Risk-Adjusted Performance

30 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, EMCOR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Empire Global Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Empire Global Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Empire Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EMCOR and Empire Global

The main advantage of trading using opposite EMCOR and Empire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Empire Global 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 Empire Global will offset losses from the drop in Empire Global's long position.

The idea behind EMCOR Group and Empire Global Gaming 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.