Correlation Between Eos Energy and CannBioRx Life

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

Diversification Opportunities for Eos Energy and CannBioRx Life

0.25

Correlation Coefficient

Eos Energy  CannBioRx Life

Modest diversification

The 3 months correlation between Eos and CannBioRx is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and CannBioRx Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CannBioRx Life Sciences 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 CannBioRx Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CannBioRx Life Sciences has no effect on the direction of Eos Energy i.e., Eos Energy and CannBioRx Life go up and down completely randomly.

Pair Corralation between Eos Energy and CannBioRx Life

Assuming the 90 days horizon Eos Energy is expected to generate 28.32 times less return on investment than CannBioRx Life. But when comparing it to its historical volatility, Eos Energy Enterprises is 1.19 times less risky than CannBioRx Life. It trades about 0.0 of its potential returns per unit of risk. CannBioRx Life Sciences is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.80  in CannBioRx Life Sciences on December 21, 2024 and sell it today you would earn a total of  0.10  from holding CannBioRx Life Sciences or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Eos Energy Enterprises  vs.  CannBioRx Life Sciences

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 fairly stable technical and fundamental indicators, Eos Energy is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CannBioRx Life Sciences

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CannBioRx Life Sciences are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, CannBioRx Life showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eos Energy and CannBioRx Life

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

The idea behind Eos Energy Enterprises and CannBioRx Life Sciences 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.