Correlation Between NeoVolta Warrant and Espey Mfg

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

By analyzing existing cross correlation between NeoVolta Warrant and Espey Mfg Electronics, you can compare the effects of market volatilities on NeoVolta Warrant and Espey Mfg 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 NeoVolta Warrant with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeoVolta Warrant and Espey Mfg.

Diversification Opportunities for NeoVolta Warrant and Espey Mfg

0.23

Correlation Coefficient

NeoVolta Warrant  Espey Mfg

Modest diversification

The 3 months correlation between NeoVolta and Espey is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding NeoVolta Warrant and Espey Mfg Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Espey Mfg Electronics and NeoVolta Warrant 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 NeoVolta Warrant are associated (or correlated) with Espey Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Espey Mfg Electronics has no effect on the direction of NeoVolta Warrant i.e., NeoVolta Warrant and Espey Mfg go up and down completely randomly.

Pair Corralation between NeoVolta Warrant and Espey Mfg

Assuming the 90 days horizon NeoVolta Warrant is expected to generate 7.94 times more return on investment than Espey Mfg. However, NeoVolta Warrant is 7.94 times more volatile than Espey Mfg Electronics. It trades about 0.14 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about -0.28 per unit of risk. If you would invest  137.00  in NeoVolta Warrant on November 19, 2024 and sell it today you would earn a total of  30.00  from holding NeoVolta Warrant or generate 21.9% return on investment over 90 days.

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

NeoVolta Warrant  vs.  Espey Mfg Electronics

NeoVolta Warrant

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NeoVolta Warrant are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NeoVolta Warrant may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Espey Mfg Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Espey Mfg Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with NeoVolta Warrant and Espey Mfg

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

The idea behind NeoVolta Warrant and Espey Mfg Electronics 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.