Correlation Between T1 Energy and ESCO Technologies

Can any of the company-specific risk be diversified away by investing in both T1 Energy 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 T1 Energy and ESCO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between T1 Energy and ESCO Technologies, you can compare the effects of market volatilities on T1 Energy 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 T1 Energy with a short position of ESCO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of T1 Energy and ESCO Technologies.

Diversification Opportunities for T1 Energy and ESCO Technologies

-0.67

Correlation Coefficient

T1 Energy  ESCO Technologies

Excellent diversification

The 3 months correlation between T1 Energy and ESCO is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding T1 Energy and ESCO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESCO Technologies and T1 Energy 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 T1 Energy 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 T1 Energy i.e., T1 Energy and ESCO Technologies go up and down completely randomly.

Pair Corralation between T1 Energy and ESCO Technologies

Allowing for the 90-day total investment horizon T1 Energy is expected to generate 5.71 times more return on investment than ESCO Technologies. However, T1 Energy is 5.71 times more volatile than ESCO Technologies. It trades about 0.2 of its potential returns per unit of risk. ESCO Technologies is currently generating about -0.01 per unit of risk. If you would invest  293.00  in T1 Energy on October 8, 2025 and sell it today you would earn a total of  472.00  from holding T1 Energy or generate 161.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

T1 Energy  vs.  ESCO Technologies

T1 Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T1 Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, T1 Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

ESCO Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days ESCO Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ESCO Technologies is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with T1 Energy and ESCO Technologies

The main advantage of trading using opposite T1 Energy and ESCO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T1 Energy 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 T1 Energy 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.