Correlation Between Eos Energy and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both Eos Energy and Acuity Brands 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 Acuity Brands 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 Acuity Brands, you can compare the effects of market volatilities on Eos Energy and Acuity Brands 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 Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Acuity Brands.
Diversification Opportunities for Eos Energy and Acuity Brands
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eos and Acuity is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands 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 Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of Eos Energy i.e., Eos Energy and Acuity Brands go up and down completely randomly.
Pair Corralation between Eos Energy and Acuity Brands
Given the investment horizon of 90 days Eos Energy Enterprises is expected to generate 4.0 times more return on investment than Acuity Brands. However, Eos Energy is 4.0 times more volatile than Acuity Brands. It trades about 0.08 of its potential returns per unit of risk. Acuity Brands is currently generating about 0.14 per unit of risk. If you would invest 116.00 in Eos Energy Enterprises on August 27, 2024 and sell it today you would earn a total of 154.00 from holding Eos Energy Enterprises or generate 132.76% 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. Acuity Brands
Performance |
| Timeline |
| Eos Energy Enterprises |
| Acuity Brands |
Eos Energy and Acuity Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eos Energy and Acuity Brands
The main advantage of trading using opposite Eos Energy and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eos Energy position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.| Eos Energy vs. FREYR Battery SA | Eos Energy vs. Microvast Holdings | Eos Energy vs. Chardan NexTech Acquisition | Eos Energy vs. Solid Power |
| Acuity Brands vs. Bloom Energy Corp | Acuity Brands vs. Eos Energy Enterprises | Acuity Brands vs. Sunrise New Energy | Acuity Brands vs. Flux Power 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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