Correlation Between GALENA MINING and EMCOR

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

By analyzing existing cross correlation between GALENA MINING LTD and EMCOR Group, you can compare the effects of market volatilities on GALENA MINING 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 GALENA MINING with a short position of EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and EMCOR.

Diversification Opportunities for GALENA MINING and EMCOR

0.0

Correlation Coefficient

GALENA MINING  EMCOR

Pay attention - limited upside

The 3 months correlation between GALENA and EMCOR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group and GALENA MINING 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 GALENA MINING LTD 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 GALENA MINING i.e., GALENA MINING and EMCOR go up and down completely randomly.

Pair Corralation between GALENA MINING and EMCOR

Assuming the 90 days horizon GALENA MINING LTD is expected to under-perform the EMCOR. But the stock apears to be less risky and, when comparing its historical volatility, GALENA MINING LTD is 1.39 times less risky than EMCOR. The stock trades about -0.03 of its potential returns per unit of risk. The EMCOR Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  19,740  in EMCOR Group on September 12, 2024 and sell it today you would earn a total of  25,960  from holding EMCOR Group or generate 131.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

GALENA MINING LTD  vs.  EMCOR Group

GALENA MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GALENA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GALENA MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

EMCOR Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EMCOR Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, EMCOR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GALENA MINING and EMCOR

The main advantage of trading using opposite GALENA MINING and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GALENA MINING 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 GALENA MINING LTD 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.