Correlation Between Espey Mfg and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Espey Mfg and FuelCell Energy 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 FuelCell Energy 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 FuelCell Energy, you can compare the effects of market volatilities on Espey Mfg and FuelCell Energy 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 FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and FuelCell Energy.
Diversification Opportunities for Espey Mfg and FuelCell Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Espey and FuelCell is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of Espey Mfg i.e., Espey Mfg and FuelCell Energy go up and down completely randomly.
Pair Corralation between Espey Mfg and FuelCell Energy
Considering the 90-day investment horizon Espey Mfg Electronics is expected to generate 0.46 times more return on investment than FuelCell Energy. However, Espey Mfg Electronics is 2.19 times less risky than FuelCell Energy. It trades about 0.08 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.07 per unit of risk. If you would invest 1,272 in Espey Mfg Electronics on August 23, 2024 and sell it today you would earn a total of 1,622 from holding Espey Mfg Electronics or generate 127.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Espey Mfg Electronics vs. FuelCell Energy
Performance |
| Timeline |
| Espey Mfg Electronics |
| FuelCell Energy |
Espey Mfg and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Espey Mfg and FuelCell Energy
The main advantage of trading using opposite Espey Mfg and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
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.
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