Correlation Between Eos Energy and Advanced Energy
Can any of the company-specific risk be diversified away by investing in both Eos Energy and Advanced 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 Eos Energy and Advanced Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eos Energy Enterprises and Advanced Energy Industries, you can compare the effects of market volatilities on Eos Energy and Advanced 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 Eos Energy with a short position of Advanced Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Advanced Energy.
Diversification Opportunities for Eos Energy and Advanced Energy
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eos and Advanced is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Advanced Energy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Energy Indu and Eos Energy 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 Eos Energy Enterprises are associated (or correlated) with Advanced Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Energy Indu has no effect on the direction of Eos Energy i.e., Eos Energy and Advanced Energy go up and down completely randomly.
Pair Corralation between Eos Energy and Advanced Energy
Given the investment horizon of 90 days Eos Energy Enterprises is expected to generate 3.44 times more return on investment than Advanced Energy. However, Eos Energy is 3.44 times more volatile than Advanced Energy Industries. It trades about 0.06 of its potential returns per unit of risk. Advanced Energy Industries is currently generating about 0.03 per unit of risk. If you would invest 115.00 in Eos Energy Enterprises on August 24, 2024 and sell it today you would earn a total of 155.00 from holding Eos Energy Enterprises or generate 134.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eos Energy Enterprises vs. Advanced Energy Industries
Performance |
| Timeline |
| Eos Energy Enterprises |
| Advanced Energy Indu |
Eos Energy and Advanced Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eos Energy and Advanced Energy
The main advantage of trading using opposite Eos Energy and Advanced Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eos Energy position performs unexpectedly, Advanced 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 Advanced Energy will offset losses from the drop in Advanced Energy's long position.| Eos Energy vs. FREYR Battery SA | Eos Energy vs. Microvast Holdings | Eos Energy vs. Chardan NexTech Acquisition | Eos Energy vs. Solid Power |
| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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