Correlation Between American Balanced and Eos Energy
Can any of the company-specific risk be diversified away by investing in both American Balanced and Eos Energy 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 American Balanced and Eos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and Eos Energy Enterprises, you can compare the effects of market volatilities on American Balanced and Eos Energy 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 American Balanced with a short position of Eos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Eos Energy.
Diversification Opportunities for American Balanced and Eos Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Eos is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises and American Balanced 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 American Balanced are associated (or correlated) with Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of American Balanced i.e., American Balanced and Eos Energy go up and down completely randomly.
Pair Corralation between American Balanced and Eos Energy
Assuming the 90 days horizon American Balanced is expected to generate 3.25 times less return on investment than Eos Energy. But when comparing it to its historical volatility, American Balanced is 9.54 times less risky than Eos Energy. It trades about 0.21 of its potential returns per unit of risk. Eos Energy Enterprises is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Eos Energy Enterprises on November 3, 2024 and sell it today you would earn a total of 7.00 from holding Eos Energy Enterprises or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced vs. Eos Energy Enterprises
Performance |
| Timeline |
| American Balanced |
| Eos Energy Enterprises |
American Balanced and Eos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Eos Energy
The main advantage of trading using opposite American Balanced and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Eos Energy 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 Eos Energy will offset losses from the drop in Eos Energy's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Eos Energy vs. Eos Energy Enterprises | Eos Energy vs. CuriosityStream | Eos Energy vs. GCM Grosvenor | Eos Energy vs. Canoo Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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