Correlation Between Advanced Energy and Eos Energy
Can any of the company-specific risk be diversified away by investing in both Advanced Energy 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 Advanced Energy and Eos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Energy Industries and Eos Energy Enterprises, you can compare the effects of market volatilities on Advanced Energy 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 Advanced Energy with a short position of Eos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Eos Energy.
Diversification Opportunities for Advanced Energy and Eos Energy
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advanced and Eos is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Industries 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 Advanced Energy 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 Advanced Energy Industries 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 Advanced Energy i.e., Advanced Energy and Eos Energy go up and down completely randomly.
Pair Corralation between Advanced Energy and Eos Energy
Given the investment horizon of 90 days Advanced Energy is expected to generate 7.93 times less return on investment than Eos Energy. But when comparing it to its historical volatility, Advanced Energy Industries is 3.03 times less risky than Eos Energy. It trades about 0.04 of its potential returns per unit of risk. Eos Energy Enterprises is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 111.00 in Eos Energy Enterprises on August 28, 2024 and sell it today you would earn a total of 168.00 from holding Eos Energy Enterprises or generate 151.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Industries vs. Eos Energy Enterprises
Performance |
| Timeline |
| Advanced Energy Indu |
| Eos Energy Enterprises |
Advanced Energy and Eos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Eos Energy
The main advantage of trading using opposite Advanced Energy and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy 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.| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
| Eos Energy vs. FREYR Battery SA | Eos Energy vs. Microvast Holdings | Eos Energy vs. Chardan NexTech Acquisition | Eos Energy vs. Solid Power |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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