Correlation Between ESS Tech and Hayward Holdings
Can any of the company-specific risk be diversified away by investing in both ESS Tech and Hayward 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 ESS Tech and Hayward Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESS Tech and Hayward Holdings, you can compare the effects of market volatilities on ESS Tech and Hayward 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 ESS Tech with a short position of Hayward Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESS Tech and Hayward Holdings.
Diversification Opportunities for ESS Tech and Hayward Holdings
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESS and Hayward is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ESS Tech and Hayward Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hayward Holdings and ESS Tech 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 ESS Tech are associated (or correlated) with Hayward Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hayward Holdings has no effect on the direction of ESS Tech i.e., ESS Tech and Hayward Holdings go up and down completely randomly.
Pair Corralation between ESS Tech and Hayward Holdings
Considering the 90-day investment horizon ESS Tech is expected to under-perform the Hayward Holdings. In addition to that, ESS Tech is 2.53 times more volatile than Hayward Holdings. It trades about -0.04 of its total potential returns per unit of risk. Hayward Holdings is currently generating about 0.06 per unit of volatility. If you would invest 937.00 in Hayward Holdings on August 24, 2024 and sell it today you would earn a total of 669.00 from holding Hayward Holdings or generate 71.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESS Tech vs. Hayward Holdings
Performance |
| Timeline |
| ESS Tech |
| Hayward Holdings |
ESS Tech and Hayward Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESS Tech and Hayward Holdings
The main advantage of trading using opposite ESS Tech and Hayward Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESS Tech position performs unexpectedly, Hayward 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 Hayward Holdings will offset losses from the drop in Hayward Holdings' long position.| ESS Tech vs. Plug Power | ESS Tech vs. Solid Power | ESS Tech vs. CBAK Energy Technology | ESS Tech vs. FuelCell Energy |
| Hayward Holdings vs. Kimball Electronics | Hayward Holdings vs. Enersys | Hayward Holdings vs. Espey Mfg Electronics | Hayward Holdings vs. Energizer Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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