Correlation Between Espey Mfg and Chicago Rivet
Can any of the company-specific risk be diversified away by investing in both Espey Mfg and Chicago Rivet 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 Chicago Rivet 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 Chicago Rivet Machine, you can compare the effects of market volatilities on Espey Mfg and Chicago Rivet 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 Chicago Rivet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and Chicago Rivet.
Diversification Opportunities for Espey Mfg and Chicago Rivet
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Espey and Chicago is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and Chicago Rivet Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Rivet Machine 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 Chicago Rivet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Rivet Machine has no effect on the direction of Espey Mfg i.e., Espey Mfg and Chicago Rivet go up and down completely randomly.
Pair Corralation between Espey Mfg and Chicago Rivet
Considering the 90-day investment horizon Espey Mfg Electronics is expected to generate 0.52 times more return on investment than Chicago Rivet. However, Espey Mfg Electronics is 1.92 times less risky than Chicago Rivet. It trades about 0.14 of its potential returns per unit of risk. Chicago Rivet Machine is currently generating about -0.27 per unit of risk. If you would invest 2,625 in Espey Mfg Electronics on January 14, 2025 and sell it today you would earn a total of 212.00 from holding Espey Mfg Electronics or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Espey Mfg Electronics vs. Chicago Rivet Machine
Performance |
| Timeline |
| Espey Mfg Electronics |
| Chicago Rivet Machine |
Espey Mfg and Chicago Rivet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Espey Mfg and Chicago Rivet
The main advantage of trading using opposite Espey Mfg and Chicago Rivet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg position performs unexpectedly, Chicago Rivet 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 Chicago Rivet will offset losses from the drop in Chicago Rivet's long position.| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
| Chicago Rivet vs. AMCON Distributing | Chicago Rivet vs. Espey Mfg Electronics | Chicago Rivet vs. Servotronics | Chicago Rivet vs. CompX International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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