Correlation Between Espey Mfg and ADS TEC
Can any of the company-specific risk be diversified away by investing in both Espey Mfg and ADS TEC 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 Espey Mfg and ADS TEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Espey Mfg Electronics and ADS TEC ENERGY PLC, you can compare the effects of market volatilities on Espey Mfg and ADS TEC 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 Espey Mfg with a short position of ADS TEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and ADS TEC.
Diversification Opportunities for Espey Mfg and ADS TEC
Very good diversification
The 3 months correlation between Espey and ADS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and ADS TEC ENERGY PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS TEC ENERGY and Espey Mfg 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 Espey Mfg Electronics are associated (or correlated) with ADS TEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS TEC ENERGY has no effect on the direction of Espey Mfg i.e., Espey Mfg and ADS TEC go up and down completely randomly.
Pair Corralation between Espey Mfg and ADS TEC
Considering the 90-day investment horizon Espey Mfg Electronics is expected to generate 0.3 times more return on investment than ADS TEC. However, Espey Mfg Electronics is 3.37 times less risky than ADS TEC. It trades about 0.11 of its potential returns per unit of risk. ADS TEC ENERGY PLC is currently generating about -0.06 per unit of risk. If you would invest 2,768 in Espey Mfg Electronics on November 9, 2024 and sell it today you would earn a total of 103.00 from holding Espey Mfg Electronics or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Espey Mfg Electronics vs. ADS TEC ENERGY PLC
Performance |
| Timeline |
| Espey Mfg Electronics |
| ADS TEC ENERGY |
Espey Mfg and ADS TEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Espey Mfg and ADS TEC
The main advantage of trading using opposite Espey Mfg and ADS TEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg position performs unexpectedly, ADS TEC 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 ADS TEC will offset losses from the drop in ADS TEC's long position.| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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