Correlation Between Tantalus Systems and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Tantalus Systems 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 Tantalus Systems and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tantalus Systems Holding and Espey Mfg Electronics, you can compare the effects of market volatilities on Tantalus Systems 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 Tantalus Systems with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tantalus Systems and Espey Mfg.
Diversification Opportunities for Tantalus Systems and Espey Mfg
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tantalus and Espey is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tantalus Systems Holding 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 Tantalus Systems 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 Tantalus Systems Holding 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 Tantalus Systems i.e., Tantalus Systems and Espey Mfg go up and down completely randomly.
Pair Corralation between Tantalus Systems and Espey Mfg
Assuming the 90 days horizon Tantalus Systems Holding is expected to generate 0.97 times more return on investment than Espey Mfg. However, Tantalus Systems Holding is 1.03 times less risky than Espey Mfg. It trades about 0.21 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about -0.05 per unit of risk. If you would invest 109.00 in Tantalus Systems Holding on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Tantalus Systems Holding or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tantalus Systems Holding vs. Espey Mfg Electronics
Performance |
| Timeline |
| Tantalus Systems Holding |
| Espey Mfg Electronics |
Tantalus Systems and Espey Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tantalus Systems and Espey Mfg
The main advantage of trading using opposite Tantalus Systems and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tantalus Systems 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.| Tantalus Systems vs. Signify NV | Tantalus Systems vs. AFC Energy plc | Tantalus Systems vs. Loop Energy | Tantalus Systems vs. Hydrogen Engine Center |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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