Correlation Between Espey Mfg and FREYR Battery
Can any of the company-specific risk be diversified away by investing in both Espey Mfg and FREYR Battery 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 FREYR Battery 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 FREYR Battery SA, you can compare the effects of market volatilities on Espey Mfg and FREYR Battery 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 FREYR Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and FREYR Battery.
Diversification Opportunities for Espey Mfg and FREYR Battery
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Espey and FREYR is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and FREYR Battery SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREYR Battery SA 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 FREYR Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREYR Battery SA has no effect on the direction of Espey Mfg i.e., Espey Mfg and FREYR Battery go up and down completely randomly.
Pair Corralation between Espey Mfg and FREYR Battery
Considering the 90-day investment horizon Espey Mfg Electronics is expected to generate 0.36 times more return on investment than FREYR Battery. However, Espey Mfg Electronics is 2.78 times less risky than FREYR Battery. It trades about 0.11 of its potential returns per unit of risk. FREYR Battery SA is currently generating about 0.02 per unit of risk. If you would invest 2,062 in Espey Mfg Electronics on August 29, 2024 and sell it today you would earn a total of 940.00 from holding Espey Mfg Electronics or generate 45.59% 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. FREYR Battery SA
Performance |
| Timeline |
| Espey Mfg Electronics |
| FREYR Battery SA |
Espey Mfg and FREYR Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Espey Mfg and FREYR Battery
The main advantage of trading using opposite Espey Mfg and FREYR Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg position performs unexpectedly, FREYR Battery 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 FREYR Battery will offset losses from the drop in FREYR Battery's long position.| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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