Correlation Between Enovix Corp and Espey Mfg

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Can any of the company-specific risk be diversified away by investing in both Enovix Corp 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 Enovix Corp and Espey Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovix Corp and Espey Mfg Electronics, you can compare the effects of market volatilities on Enovix Corp 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 Enovix Corp with a short position of Espey Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and Espey Mfg.

Diversification Opportunities for Enovix Corp and Espey Mfg

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Enovix and Espey is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Enovix 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 Enovix Corp 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 Enovix 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 Enovix Corp i.e., Enovix Corp and Espey Mfg go up and down completely randomly.

Pair Corralation between Enovix Corp and Espey Mfg

Given the investment horizon of 90 days Enovix Corp is expected to generate 2.54 times more return on investment than Espey Mfg. However, Enovix Corp is 2.54 times more volatile than Espey Mfg Electronics. It trades about 0.04 of its potential returns per unit of risk. Espey Mfg Electronics is currently generating about 0.05 per unit of risk. If you would invest  868.00  in Enovix Corp on March 27, 2024 and sell it today you would earn a total of  336.00  from holding Enovix Corp or generate 38.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Enovix Corp  vs.  Espey Mfg Electronics

 Performance 
       Timeline  
Enovix Corp 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Enovix Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Enovix Corp showed solid returns over the last few months and may actually be approaching a breakup point.
Espey Mfg Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Enovix Corp and Espey Mfg Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enovix Corp and Espey Mfg

The main advantage of trading using opposite Enovix Corp and Espey Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp 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 Enovix 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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