Correlation Between ESCO Technologies and Quanergy Systems
Can any of the company-specific risk be diversified away by investing in both ESCO Technologies and Quanergy Systems 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 Quanergy Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESCO Technologies and Quanergy Systems, you can compare the effects of market volatilities on ESCO Technologies and Quanergy Systems 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 Quanergy Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESCO Technologies and Quanergy Systems.
Diversification Opportunities for ESCO Technologies and Quanergy Systems
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ESCO and Quanergy is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding ESCO Technologies and Quanergy Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanergy Systems 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 Quanergy Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanergy Systems has no effect on the direction of ESCO Technologies i.e., ESCO Technologies and Quanergy Systems go up and down completely randomly.
Pair Corralation between ESCO Technologies and Quanergy Systems
If you would invest 10,034 in ESCO Technologies on August 28, 2024 and sell it today you would earn a total of 5,104 from holding ESCO Technologies or generate 50.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.28% |
| Values | Daily Returns |
ESCO Technologies vs. Quanergy Systems
Performance |
| Timeline |
| ESCO Technologies |
| Quanergy Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ESCO Technologies and Quanergy Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESCO Technologies and Quanergy Systems
The main advantage of trading using opposite ESCO Technologies and Quanergy Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESCO Technologies position performs unexpectedly, Quanergy Systems 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 Quanergy Systems will offset losses from the drop in Quanergy Systems' long position.| ESCO Technologies vs. Novanta | ESCO Technologies vs. Sono Tek Corp | ESCO Technologies vs. Itron Inc | ESCO Technologies vs. Badger Meter |
| Quanergy Systems vs. Weyco Group | Quanergy Systems vs. Getty Images Holdings | Quanergy Systems vs. Skechers USA | Quanergy Systems vs. Eastern Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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