Correlation Between Astar and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Astar and Espey Mfg 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 Astar and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Espey Mfg Electronics, you can compare the effects of market volatilities on Astar and Espey Mfg 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 Astar with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Espey Mfg.
Diversification Opportunities for Astar and Espey Mfg
Good diversification
The 3 months correlation between Astar and Espey is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Espey Mfg Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Espey Mfg Electronics and Astar 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 Astar are associated (or correlated) with Espey Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Espey Mfg Electronics has no effect on the direction of Astar i.e., Astar and Espey Mfg go up and down completely randomly.
Pair Corralation between Astar and Espey Mfg
Assuming the 90 days trading horizon Astar is expected to under-perform the Espey Mfg. In addition to that, Astar is 2.39 times more volatile than Espey Mfg Electronics. It trades about -0.18 of its total potential returns per unit of risk. Espey Mfg Electronics is currently generating about -0.16 per unit of volatility. If you would invest 3,015 in Espey Mfg Electronics on November 1, 2024 and sell it today you would lose (186.00) from holding Espey Mfg Electronics or give up 6.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Astar vs. Espey Mfg Electronics
Performance |
| Timeline |
| Astar |
| Espey Mfg Electronics |
Astar and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Espey Mfg
The main advantage of trading using opposite Astar and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Espey Mfg 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 Espey Mfg will offset losses from the drop in Espey Mfg's long position.The idea behind Astar and Espey Mfg Electronics 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.| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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