Correlation Between Eestech and Thermal Energy

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Can any of the company-specific risk be diversified away by investing in both Eestech and Thermal 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 Eestech and Thermal Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eestech and Thermal Energy International, you can compare the effects of market volatilities on Eestech and Thermal 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 Eestech with a short position of Thermal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eestech and Thermal Energy.

Diversification Opportunities for Eestech and Thermal Energy

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Eestech and Thermal is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eestech and Thermal Energy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermal Energy Inter and Eestech 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 Eestech are associated (or correlated) with Thermal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermal Energy Inter has no effect on the direction of Eestech i.e., Eestech and Thermal Energy go up and down completely randomly.

Pair Corralation between Eestech and Thermal Energy

If you would invest  0.04  in Eestech on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Eestech or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Eestech  vs.  Thermal Energy International

 Performance 
       Timeline  
Eestech 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Eestech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Thermal Energy Inter 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Thermal Energy International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Eestech and Thermal Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eestech and Thermal Energy

The main advantage of trading using opposite Eestech and Thermal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eestech position performs unexpectedly, Thermal 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 Thermal Energy will offset losses from the drop in Thermal Energy's long position.
The idea behind Eestech and Thermal Energy International 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.
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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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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