Correlation Between Eos Energy and Asia Pacific

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

Diversification Opportunities for Eos Energy and Asia Pacific

-0.32

Correlation Coefficient

Eos Energy  Asia Pacific

Very good diversification

The 3 months correlation between Eos and Asia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Asia Pacific Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Wire 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 Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Wire has no effect on the direction of Eos Energy i.e., Eos Energy and Asia Pacific go up and down completely randomly.

Pair Corralation between Eos Energy and Asia Pacific

Assuming the 90 days horizon Eos Energy Enterprises is expected to under-perform the Asia Pacific. In addition to that, Eos Energy is 2.42 times more volatile than Asia Pacific Wire. It trades about -0.15 of its total potential returns per unit of risk. Asia Pacific Wire is currently generating about 0.06 per unit of volatility. If you would invest  139.00  in Asia Pacific Wire on December 28, 2024 and sell it today you would earn a total of  15.00  from holding Asia Pacific Wire or generate 10.79% return on investment over 90 days.

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

Eos Energy Enterprises  vs.  Asia Pacific Wire

Eos Energy Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eos Energy Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Asia Pacific Wire

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Pacific Wire are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Asia Pacific exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eos Energy and Asia Pacific

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

The idea behind Eos Energy Enterprises and Asia Pacific Wire 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.