Correlation Between Loop Energy and Advanced Energy

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

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

Diversification Opportunities for Loop Energy and Advanced Energy

0.0

Correlation Coefficient

Loop Energy  Advanced Energy

Pay attention - limited upside

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

Pair Corralation between Loop Energy and Advanced Energy

If you would invest  8.00  in Loop Energy on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Loop Energy or generate 0.0% return on investment over 90 days.

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

Loop Energy  vs.  Advanced Energy Industries

Loop Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Loop Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Loop Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Advanced Energy Indu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Energy Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Loop Energy and Advanced Energy

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

The idea behind Loop Energy and Advanced Energy Industries 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.