Correlation Between EMCOR and Binah Capital

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

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

Diversification Opportunities for EMCOR and Binah Capital

-0.31

Correlation Coefficient

EMCOR  Binah Capital

Very good diversification

The 3 months correlation between EMCOR and Binah is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, 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 Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of EMCOR i.e., EMCOR and Binah Capital go up and down completely randomly.

Pair Corralation between EMCOR and Binah Capital

Considering the 90-day investment horizon EMCOR Group is expected to under-perform the Binah Capital. But the stock apears to be less risky and, when comparing its historical volatility, EMCOR Group is 18.58 times less risky than Binah Capital. The stock trades about -0.28 of its potential returns per unit of risk. The Binah Capital Group, is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  5.94  in Binah Capital Group, on September 27, 2024 and sell it today you would earn a total of  4.86  from holding Binah Capital Group, or generate 81.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

EMCOR Group  vs.  Binah Capital Group,

EMCOR Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, EMCOR may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Binah Capital Group,

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Binah Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMCOR and Binah Capital

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

The idea behind EMCOR Group and Binah Capital 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.