Correlation Between Advanced Energy and Loop Energy
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Loop 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 Loop 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 Loop Energy, you can compare the effects of market volatilities on Advanced Energy and Loop 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 Loop Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Loop Energy.
Diversification Opportunities for Advanced Energy and Loop Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and Loop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Industries and Loop Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Energy 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 Loop Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Energy has no effect on the direction of Advanced Energy i.e., Advanced Energy and Loop Energy go up and down completely randomly.
Pair Corralation between Advanced Energy and Loop Energy
If you would invest 10,828 in Advanced Energy Industries on August 29, 2024 and sell it today you would earn a total of 893.00 from holding Advanced Energy Industries or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Industries vs. Loop Energy
Performance |
| Timeline |
| Advanced Energy Indu |
| Loop Energy |
Advanced Energy and Loop Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Loop Energy
The main advantage of trading using opposite Advanced Energy and Loop Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Loop 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 Loop Energy will offset losses from the drop in Loop Energy's long position.| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
| Loop Energy vs. FREYR Battery SA | Loop Energy vs. nVent Electric PLC | Loop Energy vs. Hubbell | Loop Energy vs. Advanced Energy Industries |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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