Correlation Between Eos Energy and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Eos Energy 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 Eos Energy and Espey Mfg 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 Espey Mfg Electronics, you can compare the effects of market volatilities on Eos Energy 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 Eos Energy with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Espey Mfg.
Diversification Opportunities for Eos Energy and Espey Mfg
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eos and Espey is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises 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 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 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 Eos Energy i.e., Eos Energy and Espey Mfg go up and down completely randomly.
Pair Corralation between Eos Energy and Espey Mfg
Assuming the 90 days horizon Eos Energy Enterprises is expected to generate 5.13 times more return on investment than Espey Mfg. However, Eos Energy is 5.13 times more volatile than Espey Mfg Electronics. It trades about 0.08 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about 0.05 per unit of risk. If you would invest 38.00 in Eos Energy Enterprises on November 1, 2024 and sell it today you would earn a total of 88.00 from holding Eos Energy Enterprises or generate 231.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eos Energy Enterprises vs. Espey Mfg Electronics
Performance |
| Timeline |
| Eos Energy Enterprises |
| Espey Mfg Electronics |
Eos Energy and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eos Energy and Espey Mfg
The main advantage of trading using opposite Eos Energy and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eos Energy 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.| Eos Energy vs. Eos Energy Enterprises | Eos Energy vs. CuriosityStream | Eos Energy vs. GCM Grosvenor | Eos Energy vs. Canoo Holdings |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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