Correlation Between Acuity Brands and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Acuity Brands 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 Acuity Brands and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acuity Brands and Espey Mfg Electronics, you can compare the effects of market volatilities on Acuity Brands 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 Acuity Brands with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acuity Brands and Espey Mfg.
Diversification Opportunities for Acuity Brands and Espey Mfg
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Acuity and Espey is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Acuity Brands 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 Acuity Brands 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 Acuity Brands 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 Acuity Brands i.e., Acuity Brands and Espey Mfg go up and down completely randomly.
Pair Corralation between Acuity Brands and Espey Mfg
Considering the 90-day investment horizon Acuity Brands is expected to generate 0.65 times more return on investment than Espey Mfg. However, Acuity Brands is 1.53 times less risky than Espey Mfg. It trades about 0.3 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about -0.19 per unit of risk. If you would invest 30,602 in Acuity Brands on August 28, 2024 and sell it today you would earn a total of 2,377 from holding Acuity Brands or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acuity Brands vs. Espey Mfg Electronics
Performance |
| Timeline |
| Acuity Brands |
| Espey Mfg Electronics |
Acuity Brands and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acuity Brands and Espey Mfg
The main advantage of trading using opposite Acuity Brands and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acuity Brands 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.| Acuity Brands vs. Bloom Energy Corp | Acuity Brands vs. Eos Energy Enterprises | Acuity Brands vs. Sunrise New Energy | Acuity Brands vs. Flux Power Holdings |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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