Correlation Between Exro Technologies and Advanced Energy
Can any of the company-specific risk be diversified away by investing in both Exro Technologies and Advanced 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 Exro Technologies and Advanced Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exro Technologies and Advanced Energy Industries, you can compare the effects of market volatilities on Exro Technologies and Advanced 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 Exro Technologies with a short position of Advanced Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exro Technologies and Advanced Energy.
Diversification Opportunities for Exro Technologies and Advanced Energy
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exro and Advanced is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Exro Technologies and Advanced Energy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Energy Indu and Exro Technologies 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 Exro Technologies are associated (or correlated) with Advanced Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Energy Indu has no effect on the direction of Exro Technologies i.e., Exro Technologies and Advanced Energy go up and down completely randomly.
Pair Corralation between Exro Technologies and Advanced Energy
Assuming the 90 days horizon Exro Technologies is expected to generate 7.41 times more return on investment than Advanced Energy. However, Exro Technologies is 7.41 times more volatile than Advanced Energy Industries. It trades about 0.14 of its potential returns per unit of risk. Advanced Energy Industries is currently generating about 0.16 per unit of risk. If you would invest 8.80 in Exro Technologies on September 1, 2024 and sell it today you would earn a total of 2.20 from holding Exro Technologies or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exro Technologies vs. Advanced Energy Industries
Performance |
| Timeline |
| Exro Technologies |
| Advanced Energy Indu |
Exro Technologies and Advanced Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exro Technologies and Advanced Energy
The main advantage of trading using opposite Exro Technologies and Advanced Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exro Technologies position performs unexpectedly, Advanced 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 Advanced Energy will offset losses from the drop in Advanced Energy's long position.| Exro Technologies vs. Novonix Ltd ADR | Exro Technologies vs. Magnis Energy Technologies | Exro Technologies vs. Ilika plc | Exro Technologies vs. FuelPositive Corp |
| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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