Correlation Between Generation Alpha and Espey Mfg
Can any of the company-specific risk be diversified away by investing in both Generation Alpha 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 Generation Alpha and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Alpha and Espey Mfg Electronics, you can compare the effects of market volatilities on Generation Alpha 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 Generation Alpha with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Alpha and Espey Mfg.
Diversification Opportunities for Generation Alpha and Espey Mfg
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Generation and Espey is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Generation Alpha 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 Generation Alpha 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 Generation Alpha 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 Generation Alpha i.e., Generation Alpha and Espey Mfg go up and down completely randomly.
Pair Corralation between Generation Alpha and Espey Mfg
Given the investment horizon of 90 days Generation Alpha is expected to generate 8.18 times more return on investment than Espey Mfg. However, Generation Alpha is 8.18 times more volatile than Espey Mfg Electronics. It trades about 0.09 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about 0.08 per unit of risk. If you would invest 0.01 in Generation Alpha on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Generation Alpha or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Generation Alpha vs. Espey Mfg Electronics
Performance |
Timeline |
Generation Alpha |
Espey Mfg Electronics |
Generation Alpha and Espey Mfg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Generation Alpha and Espey Mfg
The main advantage of trading using opposite Generation Alpha and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Alpha 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.Generation Alpha vs. FREYR Battery SA | Generation Alpha vs. nVent Electric PLC | Generation Alpha vs. Hubbell | Generation Alpha vs. Advanced Energy Industries |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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