Correlation Between EMCOR and Logan Ridge

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both EMCOR and Logan Ridge 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 Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCOR Group and Logan Ridge Finance, you can compare the effects of market volatilities on EMCOR and Logan Ridge 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 Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCOR and Logan Ridge.

Diversification Opportunities for EMCOR and Logan Ridge

EMCORLoganDiversified AwayEMCORLoganDiversified Away100%
0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between EMCOR and Logan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance 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 Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of EMCOR i.e., EMCOR and Logan Ridge go up and down completely randomly.

Pair Corralation between EMCOR and Logan Ridge

Considering the 90-day investment horizon EMCOR Group is expected to generate 1.64 times more return on investment than Logan Ridge. However, EMCOR is 1.64 times more volatile than Logan Ridge Finance. It trades about 0.13 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.04 per unit of risk. If you would invest  14,712  in EMCOR Group on September 20, 2024 and sell it today you would earn a total of  31,718  from holding EMCOR Group or generate 215.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

EMCOR Group  vs.  Logan Ridge Finance

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0510152025
JavaScript chart by amCharts 3.21.15EME LRFC
       Timeline  
EMCOR Group 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, EMCOR may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec420440460480500520540
Logan Ridge Finance 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Logan Ridge is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2323.52424.52525.526

EMCOR and Logan Ridge Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.74-4.3-2.86-1.420.01.473.04.526.057.57 0.050.100.150.20
JavaScript chart by amCharts 3.21.15EME LRFC
       Returns  

Pair Trading with EMCOR and Logan Ridge

The main advantage of trading using opposite EMCOR and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCOR position performs unexpectedly, Logan Ridge 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 Logan Ridge will offset losses from the drop in Logan Ridge's long position.
The idea behind EMCOR Group and Logan Ridge Finance 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum


 

Trending Assets