Correlation Between Espey Mfg and Energizer Holdings
Can any of the company-specific risk be diversified away by investing in both Espey Mfg and Energizer Holdings 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 Energizer Holdings 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 Energizer Holdings, you can compare the effects of market volatilities on Espey Mfg and Energizer Holdings 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 Energizer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and Energizer Holdings.
Diversification Opportunities for Espey Mfg and Energizer Holdings
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Espey and Energizer is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings 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 Energizer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energizer Holdings has no effect on the direction of Espey Mfg i.e., Espey Mfg and Energizer Holdings go up and down completely randomly.
Pair Corralation between Espey Mfg and Energizer Holdings
Considering the 90-day investment horizon Espey Mfg Electronics is expected to under-perform the Energizer Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Espey Mfg Electronics is 1.13 times less risky than Energizer Holdings. The stock trades about -0.14 of its potential returns per unit of risk. The Energizer Holdings is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 3,277 in Energizer Holdings on August 27, 2024 and sell it today you would earn a total of 553.00 from holding Energizer Holdings or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Espey Mfg Electronics vs. Energizer Holdings
Performance |
| Timeline |
| Espey Mfg Electronics |
| Energizer Holdings |
Espey Mfg and Energizer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Espey Mfg and Energizer Holdings
The main advantage of trading using opposite Espey Mfg and Energizer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg position performs unexpectedly, Energizer Holdings 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 Energizer Holdings will offset losses from the drop in Energizer Holdings' long position.| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
| Energizer Holdings vs. Acuity Brands | Energizer Holdings vs. Espey Mfg Electronics | Energizer Holdings vs. Preformed Line Products | Energizer Holdings vs. Kimball Electronics |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |