Correlation Between Electrovaya Common and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Electrovaya Common 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 Electrovaya Common and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and Espey Mfg Electronics, you can compare the effects of market volatilities on Electrovaya Common 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 Electrovaya Common with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Espey Mfg.
Diversification Opportunities for Electrovaya Common and Espey Mfg
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electrovaya and Espey is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares 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 Electrovaya Common 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 Electrovaya Common Shares 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 Electrovaya Common i.e., Electrovaya Common and Espey Mfg go up and down completely randomly.
Pair Corralation between Electrovaya Common and Espey Mfg
Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 1.54 times more return on investment than Espey Mfg. However, Electrovaya Common is 1.54 times more volatile than Espey Mfg Electronics. It trades about 0.28 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about 0.14 per unit of risk. If you would invest 211.00 in Electrovaya Common Shares on October 20, 2024 and sell it today you would earn a total of 39.00 from holding Electrovaya Common Shares or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrovaya Common Shares vs. Espey Mfg Electronics
Performance |
| Timeline |
| Electrovaya Common Shares |
| Espey Mfg Electronics |
Electrovaya Common and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrovaya Common and Espey Mfg
The main advantage of trading using opposite Electrovaya Common and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common 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.| Electrovaya Common vs. Shenzhen Investment Holdings | Electrovaya Common vs. Ryanair Holdings PLC | Electrovaya Common vs. flyExclusive, | Electrovaya Common vs. TFI International |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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