Correlation Between Preformed Line and Expion360
Can any of the company-specific risk be diversified away by investing in both Preformed Line and Expion360 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 Preformed Line and Expion360 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Preformed Line Products and Expion360, you can compare the effects of market volatilities on Preformed Line and Expion360 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 Preformed Line with a short position of Expion360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Preformed Line and Expion360.
Diversification Opportunities for Preformed Line and Expion360
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Preformed and Expion360 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Preformed Line Products and Expion360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expion360 and Preformed Line 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 Preformed Line Products are associated (or correlated) with Expion360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expion360 has no effect on the direction of Preformed Line i.e., Preformed Line and Expion360 go up and down completely randomly.
Pair Corralation between Preformed Line and Expion360
Given the investment horizon of 90 days Preformed Line Products is expected to generate 0.31 times more return on investment than Expion360. However, Preformed Line Products is 3.24 times less risky than Expion360. It trades about 0.05 of its potential returns per unit of risk. Expion360 is currently generating about -0.05 per unit of risk. If you would invest 7,909 in Preformed Line Products on September 18, 2024 and sell it today you would earn a total of 5,396 from holding Preformed Line Products or generate 68.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Preformed Line Products vs. Expion360
Performance |
Timeline |
Preformed Line Products |
Expion360 |
Preformed Line and Expion360 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Preformed Line and Expion360
The main advantage of trading using opposite Preformed Line and Expion360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Preformed Line position performs unexpectedly, Expion360 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 Expion360 will offset losses from the drop in Expion360's long position.Preformed Line vs. Kimball Electronics | Preformed Line vs. nVent Electric PLC | Preformed Line vs. Espey Mfg Electronics | Preformed Line vs. Hubbell |
Expion360 vs. Energizer Holdings | Expion360 vs. Acuity Brands | Expion360 vs. Espey Mfg Electronics | Expion360 vs. Preformed Line Products |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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