Correlation Between ESCO Technologies and II-VI Incorporated
Can any of the company-specific risk be diversified away by investing in both ESCO Technologies and II-VI Incorporated 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 ESCO Technologies and II-VI Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESCO Technologies and II VI Incorporated, you can compare the effects of market volatilities on ESCO Technologies and II-VI Incorporated 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 ESCO Technologies with a short position of II-VI Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESCO Technologies and II-VI Incorporated.
Diversification Opportunities for ESCO Technologies and II-VI Incorporated
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ESCO and II-VI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ESCO Technologies and II VI Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on II-VI Incorporated and ESCO Technologies 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 ESCO Technologies are associated (or correlated) with II-VI Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of II-VI Incorporated has no effect on the direction of ESCO Technologies i.e., ESCO Technologies and II-VI Incorporated go up and down completely randomly.
Pair Corralation between ESCO Technologies and II-VI Incorporated
If you would invest 13,007 in ESCO Technologies on August 28, 2024 and sell it today you would earn a total of 2,131 from holding ESCO Technologies or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
ESCO Technologies vs. II VI Incorporated
Performance |
| Timeline |
| ESCO Technologies |
| II-VI Incorporated |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ESCO Technologies and II-VI Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESCO Technologies and II-VI Incorporated
The main advantage of trading using opposite ESCO Technologies and II-VI Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESCO Technologies position performs unexpectedly, II-VI Incorporated 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 II-VI Incorporated will offset losses from the drop in II-VI Incorporated's long position.| ESCO Technologies vs. Novanta | ESCO Technologies vs. Sono Tek Corp | ESCO Technologies vs. Itron Inc | ESCO Technologies vs. Badger Meter |
| II-VI Incorporated vs. BioNTech SE | II-VI Incorporated vs. Sweetgreen | II-VI Incorporated vs. Amgen Inc | II-VI Incorporated vs. Viemed Healthcare |
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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