Correlation Between GrafTech International and Eos Energy
Can any of the company-specific risk be diversified away by investing in both GrafTech International and Eos 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 GrafTech International and Eos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrafTech International and Eos Energy Enterprises, you can compare the effects of market volatilities on GrafTech International and Eos 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 GrafTech International with a short position of Eos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrafTech International and Eos Energy.
Diversification Opportunities for GrafTech International and Eos Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GrafTech and Eos is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding GrafTech International and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises and GrafTech International 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 GrafTech International are associated (or correlated) with Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of GrafTech International i.e., GrafTech International and Eos Energy go up and down completely randomly.
Pair Corralation between GrafTech International and Eos Energy
Considering the 90-day investment horizon GrafTech International is expected to under-perform the Eos Energy. But the stock apears to be less risky and, when comparing its historical volatility, GrafTech International is 2.61 times less risky than Eos Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Eos Energy Enterprises is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Eos Energy Enterprises on August 24, 2024 and sell it today you would lose (7.35) from holding Eos Energy Enterprises or give up 29.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrafTech International vs. Eos Energy Enterprises
Performance |
| Timeline |
| GrafTech International |
| Eos Energy Enterprises |
GrafTech International and Eos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrafTech International and Eos Energy
The main advantage of trading using opposite GrafTech International and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrafTech International position performs unexpectedly, Eos 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 Eos Energy will offset losses from the drop in Eos Energy's long position.| GrafTech International vs. Kimball Electronics | GrafTech International vs. Hayward Holdings | GrafTech International vs. Enersys | GrafTech International vs. Espey Mfg Electronics |
| Eos Energy vs. Eos Energy Enterprises | Eos Energy vs. CuriosityStream | Eos Energy vs. GCM Grosvenor | Eos Energy vs. Canoo Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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