Correlation Between II-VI Incorporated and ESCO Technologies
Can any of the company-specific risk be diversified away by investing in both II-VI Incorporated and ESCO Technologies 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 II-VI Incorporated and ESCO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between II VI Incorporated and ESCO Technologies, you can compare the effects of market volatilities on II-VI Incorporated and ESCO Technologies 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 II-VI Incorporated with a short position of ESCO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of II-VI Incorporated and ESCO Technologies.
Diversification Opportunities for II-VI Incorporated and ESCO Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between II-VI and ESCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding II VI Incorporated and ESCO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESCO Technologies and II-VI Incorporated 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 II VI Incorporated are associated (or correlated) with ESCO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESCO Technologies has no effect on the direction of II-VI Incorporated i.e., II-VI Incorporated and ESCO Technologies go up and down completely randomly.
Pair Corralation between II-VI Incorporated and ESCO Technologies
If you would invest 10,361 in ESCO Technologies on August 24, 2024 and sell it today you would earn a total of 4,520 from holding ESCO Technologies or generate 43.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
II VI Incorporated vs. ESCO Technologies
Performance |
| Timeline |
| II-VI Incorporated |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ESCO Technologies |
II-VI Incorporated and ESCO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with II-VI Incorporated and ESCO Technologies
The main advantage of trading using opposite II-VI Incorporated and ESCO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if II-VI Incorporated position performs unexpectedly, ESCO Technologies 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 ESCO Technologies will offset losses from the drop in ESCO Technologies' long position.| II-VI Incorporated vs. Bill Com Holdings | II-VI Incorporated vs. Pinterest | II-VI Incorporated vs. Qualys Inc | II-VI Incorporated vs. Tenaris SA ADR |
| ESCO Technologies vs. Novanta | ESCO Technologies vs. Sono Tek Corp | ESCO Technologies vs. Itron Inc | ESCO Technologies vs. Badger Meter |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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