Correlation Between TMT Acquisition and Espey Mfg

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

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

Diversification Opportunities for TMT Acquisition and Espey Mfg

0.0

Correlation Coefficient

TMT Acquisition  Espey Mfg

Pay attention - limited upside

The 3 months correlation between TMT and Espey is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TMT Acquisition Corp 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 TMT Acquisition 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 TMT Acquisition Corp 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 TMT Acquisition i.e., TMT Acquisition and Espey Mfg go up and down completely randomly.

Pair Corralation between TMT Acquisition and Espey Mfg

If you would invest  2,855  in Espey Mfg Electronics on October 3, 2024 and sell it today you would earn a total of  160.00  from holding Espey Mfg Electronics or generate 5.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

TMT Acquisition Corp  vs.  Espey Mfg Electronics

TMT Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TMT Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, TMT Acquisition is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Espey Mfg Electronics

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Espey Mfg Electronics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Espey Mfg may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TMT Acquisition and Espey Mfg

The main advantage of trading using opposite TMT Acquisition and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMT Acquisition 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 TMT Acquisition Corp 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.