Correlation Between Eestech and Energy

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

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

Diversification Opportunities for Eestech and Energy

0.0

Correlation Coefficient

Eestech  Energy

Pay attention - limited upside

The 3 months correlation between Eestech and Energy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eestech and Energy and Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy and Water and Eestech 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 Eestech are associated (or correlated) with Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy and Water has no effect on the direction of Eestech i.e., Eestech and Energy go up and down completely randomly.

Pair Corralation between Eestech and Energy

If you would invest  0.38  in Energy and Water on December 29, 2024 and sell it today you would lose (0.16) from holding Energy and Water or give up 42.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Eestech  vs.  Energy and Water

Eestech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eestech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eestech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Energy and Water

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energy and Water has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile basic indicators, Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Eestech and Energy

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

The idea behind Eestech and Energy and Water 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .