Correlation Between Loop Energy and Eos Energy

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

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

Diversification Opportunities for Loop Energy and Eos Energy

0.0

Correlation Coefficient

Loop Energy  Eos Energy

Pay attention - limited upside

The 3 months correlation between Loop and Eos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Loop Energy 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 Loop 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 Loop Energy 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 Loop Energy i.e., Loop Energy and Eos Energy go up and down completely randomly.

Pair Corralation between Loop Energy and Eos Energy

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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Loop Energy  vs.  Eos Energy Enterprises

Loop Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loop Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Loop Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Loop Energy and Eos Energy

The main advantage of trading using opposite Loop Energy and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Energy 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 Loop Energy 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.