Correlation Between MKS Instruments and ESCO Technologies
Can any of the company-specific risk be diversified away by investing in both MKS Instruments 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 MKS Instruments and ESCO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MKS Instruments and ESCO Technologies, you can compare the effects of market volatilities on MKS Instruments 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 MKS Instruments with a short position of ESCO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MKS Instruments and ESCO Technologies.
Diversification Opportunities for MKS Instruments and ESCO Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MKS and ESCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MKS Instruments and ESCO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESCO Technologies and MKS Instruments 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 MKS Instruments 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 MKS Instruments i.e., MKS Instruments and ESCO Technologies go up and down completely randomly.
Pair Corralation between MKS Instruments and ESCO Technologies
Given the investment horizon of 90 days MKS Instruments is expected to generate 1.52 times less return on investment than ESCO Technologies. In addition to that, MKS Instruments is 1.72 times more volatile than ESCO Technologies. It trades about 0.03 of its total potential returns per unit of risk. ESCO Technologies is currently generating about 0.08 per unit of volatility. If you would invest 10,217 in ESCO Technologies on August 27, 2024 and sell it today you would earn a total of 4,677 from holding ESCO Technologies or generate 45.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MKS Instruments vs. ESCO Technologies
Performance |
| Timeline |
| MKS Instruments |
| ESCO Technologies |
MKS Instruments and ESCO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MKS Instruments and ESCO Technologies
The main advantage of trading using opposite MKS Instruments and ESCO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MKS Instruments 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.| MKS Instruments vs. Vontier Corp | MKS Instruments vs. Teledyne Technologies Incorporated | MKS Instruments vs. ESCO Technologies | MKS Instruments vs. Sensata Technologies Holding |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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