Correlation Between Global Pole and Eos Energy

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

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

Diversification Opportunities for Global Pole and Eos Energy

-0.02

Correlation Coefficient

Global Pole  Eos Energy

Good diversification

The 3 months correlation between Global and Eos is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global Pole Trusion 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 Global Pole 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 Global Pole Trusion 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 Global Pole i.e., Global Pole and Eos Energy go up and down completely randomly.

Pair Corralation between Global Pole and Eos Energy

Given the investment horizon of 90 days Global Pole Trusion is expected to generate 21.13 times more return on investment than Eos Energy. However, Global Pole is 21.13 times more volatile than Eos Energy Enterprises. It trades about 0.13 of its potential returns per unit of risk. Eos Energy Enterprises is currently generating about 0.19 per unit of risk. If you would invest  0.90  in Global Pole Trusion on September 26, 2024 and sell it today you would earn a total of  39.10  from holding Global Pole Trusion or generate 4344.44% return on investment over 90 days.

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

Global Pole Trusion  vs.  Eos Energy Enterprises

Global Pole Trusion

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Pole Trusion are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Global Pole exhibited solid returns over the last few months and may actually be approaching a breakup point.

Eos Energy Enterprises

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eos Energy Enterprises are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Eos Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Pole and Eos Energy

The main advantage of trading using opposite Global Pole and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Pole 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.

The idea behind Global Pole Trusion and Eos Energy Enterprises 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.