Correlation Between Tritium Dcfc and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Tritium Dcfc 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 Tritium Dcfc and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tritium Dcfc and Espey Mfg Electronics, you can compare the effects of market volatilities on Tritium Dcfc 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 Tritium Dcfc with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tritium Dcfc and Espey Mfg.
Diversification Opportunities for Tritium Dcfc and Espey Mfg
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tritium and Espey is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tritium Dcfc 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 Tritium Dcfc 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 Tritium Dcfc 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 Tritium Dcfc i.e., Tritium Dcfc and Espey Mfg go up and down completely randomly.
Pair Corralation between Tritium Dcfc and Espey Mfg
Given the investment horizon of 90 days Tritium Dcfc is expected to generate 25.2 times more return on investment than Espey Mfg. However, Tritium Dcfc is 25.2 times more volatile than Espey Mfg Electronics. It trades about 0.23 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about -0.1 per unit of risk. If you would invest 1.58 in Tritium Dcfc on November 2, 2024 and sell it today you would earn a total of 1.42 from holding Tritium Dcfc or generate 89.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tritium Dcfc vs. Espey Mfg Electronics
Performance |
| Timeline |
| Tritium Dcfc |
| Espey Mfg Electronics |
Tritium Dcfc and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tritium Dcfc and Espey Mfg
The main advantage of trading using opposite Tritium Dcfc and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tritium Dcfc 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.| Tritium Dcfc vs. Microvast Holdings | Tritium Dcfc vs. FREYR Battery SA | Tritium Dcfc vs. Bloom Energy Corp | Tritium Dcfc vs. Enovix Corp |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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