Correlation Between SaverOne 2014 and ESCO Technologies

Can any of the company-specific risk be diversified away by investing in both SaverOne 2014 and ESCO Technologies 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 SaverOne 2014 and ESCO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SaverOne 2014 Ltd and ESCO Technologies, you can compare the effects of market volatilities on SaverOne 2014 and ESCO Technologies 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 SaverOne 2014 with a short position of ESCO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SaverOne 2014 and ESCO Technologies.

Diversification Opportunities for SaverOne 2014 and ESCO Technologies

0.74

Correlation Coefficient

SaverOne 2014  ESCO Technologies

Poor diversification

The 3 months correlation between SaverOne and ESCO is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SaverOne 2014 Ltd and ESCO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESCO Technologies and SaverOne 2014 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 SaverOne 2014 Ltd are associated (or correlated) with ESCO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESCO Technologies has no effect on the direction of SaverOne 2014 i.e., SaverOne 2014 and ESCO Technologies go up and down completely randomly.

Pair Corralation between SaverOne 2014 and ESCO Technologies

Assuming the 90 days horizon SaverOne 2014 Ltd is expected to generate 10.26 times more return on investment than ESCO Technologies. However, SaverOne 2014 is 10.26 times more volatile than ESCO Technologies. It trades about 0.14 of its potential returns per unit of risk. ESCO Technologies is currently generating about 0.1 per unit of risk. If you would invest  1.71  in SaverOne 2014 Ltd on December 29, 2024 and sell it today you would lose (0.11) from holding SaverOne 2014 Ltd or give up 6.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	59.02%
Values	Daily Returns

SaverOne 2014 Ltd  vs.  ESCO Technologies

SaverOne 2014

Risk-Adjusted Performance

OK

Over the last 90 days SaverOne 2014 Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady technical and fundamental indicators, SaverOne 2014 showed solid returns over the last few months and may actually be approaching a breakup point.

ESCO Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ESCO Technologies are ranked lower than 7 (%) 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.

Pair Trading with SaverOne 2014 and ESCO Technologies

The main advantage of trading using opposite SaverOne 2014 and ESCO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SaverOne 2014 position performs unexpectedly, ESCO Technologies 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 ESCO Technologies will offset losses from the drop in ESCO Technologies' long position.

The idea behind SaverOne 2014 Ltd and ESCO Technologies 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.