Correlation Between SmarTone Telecommunicatio and ESS Tech
Can any of the company-specific risk be diversified away by investing in both SmarTone Telecommunicatio and ESS Tech 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 SmarTone Telecommunicatio and ESS Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmarTone Telecommunications Holdings and ESS Tech, you can compare the effects of market volatilities on SmarTone Telecommunicatio and ESS Tech 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 SmarTone Telecommunicatio with a short position of ESS Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmarTone Telecommunicatio and ESS Tech.
Diversification Opportunities for SmarTone Telecommunicatio and ESS Tech
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SmarTone and ESS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SmarTone Telecommunications Ho and ESS Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESS Tech and SmarTone Telecommunicatio 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 SmarTone Telecommunications Holdings are associated (or correlated) with ESS Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESS Tech has no effect on the direction of SmarTone Telecommunicatio i.e., SmarTone Telecommunicatio and ESS Tech go up and down completely randomly.
Pair Corralation between SmarTone Telecommunicatio and ESS Tech
Assuming the 90 days horizon SmarTone Telecommunicatio is expected to generate 43.22 times less return on investment than ESS Tech. But when comparing it to its historical volatility, SmarTone Telecommunications Holdings is 47.86 times less risky than ESS Tech. It trades about 0.13 of its potential returns per unit of risk. ESS Tech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 138.00 in ESS Tech on September 3, 2025 and sell it today you would earn a total of 103.00 from holding ESS Tech or generate 74.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SmarTone Telecommunications Ho vs. ESS Tech
Performance |
| Timeline |
| SmarTone Telecommunicatio |
| ESS Tech |
SmarTone Telecommunicatio and ESS Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SmarTone Telecommunicatio and ESS Tech
The main advantage of trading using opposite SmarTone Telecommunicatio and ESS Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmarTone Telecommunicatio position performs unexpectedly, ESS Tech 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 ESS Tech will offset losses from the drop in ESS Tech's long position.The idea behind SmarTone Telecommunications Holdings and ESS Tech 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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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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