Correlation Between Expand Energy and Scepter Holdings
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Scepter 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 Expand Energy and Scepter Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Scepter Holdings, you can compare the effects of market volatilities on Expand Energy and Scepter 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 Expand Energy with a short position of Scepter Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Scepter Holdings.
Diversification Opportunities for Expand Energy and Scepter Holdings
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Expand and Scepter is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings and Expand Energy 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 Expand Energy are associated (or correlated) with Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of Expand Energy i.e., Expand Energy and Scepter Holdings go up and down completely randomly.
Pair Corralation between Expand Energy and Scepter Holdings
Assuming the 90 days horizon Expand Energy is expected to generate 0.17 times more return on investment than Scepter Holdings. However, Expand Energy is 5.99 times less risky than Scepter Holdings. It trades about 0.35 of its potential returns per unit of risk. Scepter Holdings is currently generating about 0.0 per unit of risk. If you would invest 8,963 in Expand Energy on November 3, 2024 and sell it today you would earn a total of 1,169 from holding Expand Energy or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Expand Energy vs. Scepter Holdings
Performance |
| Timeline |
| Expand Energy |
| Scepter Holdings |
Expand Energy and Scepter Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Scepter Holdings
The main advantage of trading using opposite Expand Energy and Scepter Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Scepter 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 Scepter Holdings will offset losses from the drop in Scepter Holdings' long position.| Expand Energy vs. Grupo Aeroportuario del | Expand Energy vs. Mako Mining Corp | Expand Energy vs. ioneer Ltd American | Expand Energy vs. Harmony Gold Mining |
| Scepter Holdings vs. Qed Connect | Scepter Holdings vs. Nates Food Co | Scepter Holdings vs. Sharing Services Global | Scepter Holdings vs. Stryve Foods |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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