Correlation Between EMCOR and PT Bank

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

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

Diversification Opportunities for EMCOR and PT Bank

0.23

Correlation Coefficient

EMCOR  PT Bank

Modest diversification

The 3 months correlation between EMCOR and NKX is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding EMCOR Group and PT Bank CIMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank CIMB 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank CIMB has no effect on the direction of EMCOR i.e., EMCOR and PT Bank go up and down completely randomly.

Pair Corralation between EMCOR and PT Bank

Assuming the 90 days horizon EMCOR Group is expected to generate 1.53 times more return on investment than PT Bank. However, EMCOR is 1.53 times more volatile than PT Bank CIMB. It trades about 0.09 of its potential returns per unit of risk. PT Bank CIMB is currently generating about 0.0 per unit of risk. If you would invest  19,106  in EMCOR Group on April 20, 2025 and sell it today you would earn a total of  29,464  from holding EMCOR Group or generate 154.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

EMCOR Group  vs.  PT Bank CIMB

EMCOR Group

Risk-Adjusted Performance

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. Despite nearly uncertain basic indicators, EMCOR reported solid returns over the last few months and may actually be approaching a breakup point.

PT Bank CIMB

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bank CIMB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PT Bank is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EMCOR and PT Bank

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

The idea behind EMCOR Group and PT Bank CIMB 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..