Correlation Between Eos Energy and Tantalus Systems

Can any of the company-specific risk be diversified away by investing in both Eos Energy and Tantalus Systems 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 Eos Energy and Tantalus Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eos Energy Enterprises and Tantalus Systems Holding, you can compare the effects of market volatilities on Eos Energy and Tantalus Systems 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 Eos Energy with a short position of Tantalus Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Tantalus Systems.

Diversification Opportunities for Eos Energy and Tantalus Systems

-0.13

Correlation Coefficient

Eos Energy  Tantalus Systems

Good diversification

The 3 months correlation between Eos and Tantalus is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Tantalus Systems Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tantalus Systems Holding and Eos 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 Eos Energy Enterprises are associated (or correlated) with Tantalus Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tantalus Systems Holding has no effect on the direction of Eos Energy i.e., Eos Energy and Tantalus Systems go up and down completely randomly.

Pair Corralation between Eos Energy and Tantalus Systems

Given the investment horizon of 90 days Eos Energy Enterprises is expected to generate 3.46 times more return on investment than Tantalus Systems. However, Eos Energy is 3.46 times more volatile than Tantalus Systems Holding. It trades about 0.07 of its potential returns per unit of risk. Tantalus Systems Holding is currently generating about 0.15 per unit of risk. If you would invest  275.00  in Eos Energy Enterprises on September 14, 2024 and sell it today you would earn a total of  47.00  from holding Eos Energy Enterprises or generate 17.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Eos Energy Enterprises  vs.  Tantalus Systems Holding

Eos Energy Enterprises

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eos Energy Enterprises are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Eos Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tantalus Systems Holding

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tantalus Systems Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Tantalus Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eos Energy and Tantalus Systems

The main advantage of trading using opposite Eos Energy and Tantalus Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eos Energy position performs unexpectedly, Tantalus Systems 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 Tantalus Systems will offset losses from the drop in Tantalus Systems' long position.

The idea behind Eos Energy Enterprises and Tantalus Systems Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.