Correlation Between Espey Mfg and Tantalus Systems
Can any of the company-specific risk be diversified away by investing in both Espey Mfg and Tantalus Systems 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 Tantalus Systems 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 Tantalus Systems Holding, you can compare the effects of market volatilities on Espey Mfg and Tantalus Systems 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 Tantalus Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Espey Mfg and Tantalus Systems.
Diversification Opportunities for Espey Mfg and Tantalus Systems
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Espey and Tantalus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Espey Mfg Electronics and Tantalus Systems Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tantalus Systems Holding 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 Tantalus Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tantalus Systems Holding has no effect on the direction of Espey Mfg i.e., Espey Mfg and Tantalus Systems go up and down completely randomly.
Pair Corralation between Espey Mfg and Tantalus Systems
Considering the 90-day investment horizon Espey Mfg Electronics is expected to generate 0.72 times more return on investment than Tantalus Systems. However, Espey Mfg Electronics is 1.39 times less risky than Tantalus Systems. It trades about 0.08 of its potential returns per unit of risk. Tantalus Systems Holding is currently generating about 0.06 per unit of risk. If you would invest 1,263 in Espey Mfg Electronics on August 29, 2024 and sell it today you would earn a total of 1,776 from holding Espey Mfg Electronics or generate 140.62% 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. Tantalus Systems Holding
Performance |
| Timeline |
| Espey Mfg Electronics |
| Tantalus Systems Holding |
Espey Mfg and Tantalus Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Espey Mfg and Tantalus Systems
The main advantage of trading using opposite Espey Mfg and Tantalus Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Espey Mfg position performs unexpectedly, Tantalus Systems 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 Tantalus Systems will offset losses from the drop in Tantalus Systems' long position.| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
| Tantalus Systems vs. Signify NV | Tantalus Systems vs. AFC Energy plc | Tantalus Systems vs. Loop Energy | Tantalus Systems vs. Hydrogen Engine Center |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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