Correlation Between Polar Power and Eos Energy
Can any of the company-specific risk be diversified away by investing in both Polar Power and Eos 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 Polar Power and Eos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Power and Eos Energy Enterprises, you can compare the effects of market volatilities on Polar Power and Eos 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 Polar Power with a short position of Eos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Power and Eos Energy.
Diversification Opportunities for Polar Power and Eos Energy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Polar and Eos is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Polar Power and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises and Polar Power 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 Polar Power are associated (or correlated) with Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of Polar Power i.e., Polar Power and Eos Energy go up and down completely randomly.
Pair Corralation between Polar Power and Eos Energy
Given the investment horizon of 90 days Polar Power is expected to generate 9.02 times less return on investment than Eos Energy. But when comparing it to its historical volatility, Polar Power is 1.15 times less risky than Eos Energy. It trades about 0.02 of its potential returns per unit of risk. Eos Energy Enterprises is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Eos Energy Enterprises on August 24, 2024 and sell it today you would earn a total of 181.00 from holding Eos Energy Enterprises or generate 258.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Power vs. Eos Energy Enterprises
Performance |
| Timeline |
| Polar Power |
| Eos Energy Enterprises |
Polar Power and Eos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Power and Eos Energy
The main advantage of trading using opposite Polar Power and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Power position performs unexpectedly, Eos 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 Eos Energy will offset losses from the drop in Eos Energy's long position.| Polar Power vs. Bloom Energy Corp | Polar Power vs. Kimball Electronics | Polar Power vs. Enovix Corp | Polar Power vs. Sunrise New Energy |
| Eos Energy vs. Bloom Energy Corp | Eos Energy vs. Kimball Electronics | Eos Energy vs. Enovix Corp | Eos Energy vs. Sunrise New Energy |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |