Correlation Between Advanced Energy and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Exro Technologies 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 Exro Technologies 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 Exro Technologies, you can compare the effects of market volatilities on Advanced Energy and Exro Technologies 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 Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Exro Technologies.
Diversification Opportunities for Advanced Energy and Exro Technologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Exro is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Industries and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Advanced Energy i.e., Advanced Energy and Exro Technologies go up and down completely randomly.
Pair Corralation between Advanced Energy and Exro Technologies
Given the investment horizon of 90 days Advanced Energy Industries is expected to generate 0.37 times more return on investment than Exro Technologies. However, Advanced Energy Industries is 2.68 times less risky than Exro Technologies. It trades about 0.03 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.05 per unit of risk. If you would invest 9,080 in Advanced Energy Industries on August 29, 2024 and sell it today you would earn a total of 2,641 from holding Advanced Energy Industries or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Industries vs. Exro Technologies
Performance |
| Timeline |
| Advanced Energy Indu |
| Exro Technologies |
Advanced Energy and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Exro Technologies
The main advantage of trading using opposite Advanced Energy and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
| Exro Technologies vs. Novonix Ltd ADR | Exro Technologies vs. Magnis Energy Technologies | Exro Technologies vs. Ilika plc | Exro Technologies vs. FuelPositive Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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