Correlation Between Eos Energy and Atkore International

Can any of the company-specific risk be diversified away by investing in both Eos Energy and Atkore International 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 Atkore International 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 Atkore International Group, you can compare the effects of market volatilities on Eos Energy and Atkore International 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 Atkore International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Atkore International.

Diversification Opportunities for Eos Energy and Atkore International

-0.55

Correlation Coefficient

Eos Energy  Atkore International

Excellent diversification

The 3 months correlation between Eos and Atkore is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Atkore International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atkore International 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 Atkore International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atkore International has no effect on the direction of Eos Energy i.e., Eos Energy and Atkore International go up and down completely randomly.

Pair Corralation between Eos Energy and Atkore International

Given the investment horizon of 90 days Eos Energy Enterprises is expected to generate 2.15 times more return on investment than Atkore International. However, Eos Energy is 2.15 times more volatile than Atkore International Group. It trades about 0.17 of its potential returns per unit of risk. Atkore International Group is currently generating about 0.0 per unit of risk. If you would invest  326.00  in Eos Energy Enterprises on October 7, 2024 and sell it today you would earn a total of  241.00  from holding Eos Energy Enterprises or generate 73.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eos Energy Enterprises  vs.  Atkore International Group

Eos Energy Enterprises

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eos Energy Enterprises are ranked lower than 13 (%) 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.

Atkore International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atkore International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Atkore International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eos Energy and Atkore International

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

The idea behind Eos Energy Enterprises and Atkore International Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.