Correlation Between Solid Power and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Solid Power and Espey Mfg 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 Solid Power and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solid Power and Espey Mfg Electronics, you can compare the effects of market volatilities on Solid Power and Espey Mfg 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 Solid Power with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Power and Espey Mfg.
Diversification Opportunities for Solid Power and Espey Mfg
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Solid and Espey is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Solid Power and Espey Mfg Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Espey Mfg Electronics and Solid 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 Solid Power are associated (or correlated) with Espey Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Espey Mfg Electronics has no effect on the direction of Solid Power i.e., Solid Power and Espey Mfg go up and down completely randomly.
Pair Corralation between Solid Power and Espey Mfg
Given the investment horizon of 90 days Solid Power is expected to under-perform the Espey Mfg. In addition to that, Solid Power is 1.93 times more volatile than Espey Mfg Electronics. It trades about -0.02 of its total potential returns per unit of risk. Espey Mfg Electronics is currently generating about 0.08 per unit of volatility. If you would invest 1,258 in Espey Mfg Electronics on August 24, 2024 and sell it today you would earn a total of 1,690 from holding Espey Mfg Electronics or generate 134.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solid Power vs. Espey Mfg Electronics
Performance |
| Timeline |
| Solid Power |
| Espey Mfg Electronics |
Solid Power and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solid Power and Espey Mfg
The main advantage of trading using opposite Solid Power and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Power position performs unexpectedly, Espey Mfg 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 Espey Mfg will offset losses from the drop in Espey Mfg's long position.| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power vs. Enovix Corp |
| Espey Mfg vs. Chicago Rivet Machine | Espey Mfg vs. Eastern Co | Espey Mfg vs. Servotronics | Espey Mfg vs. Evans Bancorp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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