Correlation Between Loop Energy and Eguana Technologies
Can any of the company-specific risk be diversified away by investing in both Loop Energy and Eguana 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 Loop Energy and Eguana Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Energy and Eguana Technologies, you can compare the effects of market volatilities on Loop Energy and Eguana 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 Loop Energy with a short position of Eguana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Energy and Eguana Technologies.
Diversification Opportunities for Loop Energy and Eguana Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Loop and Eguana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Loop Energy and Eguana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eguana Technologies and Loop 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 Loop Energy are associated (or correlated) with Eguana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eguana Technologies has no effect on the direction of Loop Energy i.e., Loop Energy and Eguana Technologies go up and down completely randomly.
Pair Corralation between Loop Energy and Eguana Technologies
Assuming the 90 days horizon Loop Energy is expected to generate 2.82 times more return on investment than Eguana Technologies. However, Loop Energy is 2.82 times more volatile than Eguana Technologies. It trades about 0.03 of its potential returns per unit of risk. Eguana Technologies is currently generating about 0.01 per unit of risk. If you would invest 93.00 in Loop Energy on August 28, 2024 and sell it today you would lose (85.00) from holding Loop Energy or give up 91.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loop Energy vs. Eguana Technologies
Performance |
| Timeline |
| Loop Energy |
| Eguana Technologies |
Loop Energy and Eguana Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Energy and Eguana Technologies
The main advantage of trading using opposite Loop Energy and Eguana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Energy position performs unexpectedly, Eguana 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 Eguana Technologies will offset losses from the drop in Eguana Technologies' long position.| Loop Energy vs. Legrand SA ADR | Loop Energy vs. AFC Energy plc | Loop Energy vs. Sunrise New Energy | Loop Energy vs. Tantalus Systems Holding |
| Eguana Technologies vs. Element Solutions | Eguana Technologies vs. Orion Engineered Carbons | Eguana Technologies vs. Minerals Technologies | Eguana Technologies vs. Ingevity Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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