Correlation Between ESCO Technologies and Dynasil Of

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

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

Diversification Opportunities for ESCO Technologies and Dynasil Of

0.44

Correlation Coefficient

ESCO Technologies  Dynasil Of

Very weak diversification

The 3 months correlation between ESCO and Dynasil is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ESCO Technologies and Dynasil of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynasil Of and ESCO Technologies 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 ESCO Technologies are associated (or correlated) with Dynasil Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynasil Of has no effect on the direction of ESCO Technologies i.e., ESCO Technologies and Dynasil Of go up and down completely randomly.

Pair Corralation between ESCO Technologies and Dynasil Of

Considering the 90-day investment horizon ESCO Technologies is expected to generate 2.13 times more return on investment than Dynasil Of. However, ESCO Technologies is 2.13 times more volatile than Dynasil of. It trades about 0.07 of its potential returns per unit of risk. Dynasil of is currently generating about 0.0 per unit of risk. If you would invest  8,981  in ESCO Technologies on September 3, 2024 and sell it today you would earn a total of  5,860  from holding ESCO Technologies or generate 65.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	7.88%
Values	Daily Returns

ESCO Technologies  vs.  Dynasil of

ESCO Technologies

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ESCO Technologies are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ESCO Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dynasil Of

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dynasil of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Dynasil Of is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ESCO Technologies and Dynasil Of

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

The idea behind ESCO Technologies and Dynasil of 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.