Correlation Between Ametek and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both Ametek and Enerpac Tool 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 Ametek and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ametek Inc and Enerpac Tool Group, you can compare the effects of market volatilities on Ametek and Enerpac Tool 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 Ametek with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and Enerpac Tool.
Diversification Opportunities for Ametek and Enerpac Tool
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ametek and Enerpac is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc and Enerpac Tool Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerpac Tool Group and Ametek 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 Ametek Inc are associated (or correlated) with Enerpac Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerpac Tool Group has no effect on the direction of Ametek i.e., Ametek and Enerpac Tool go up and down completely randomly.
Pair Corralation between Ametek and Enerpac Tool
Considering the 90-day investment horizon Ametek Inc is expected to generate 0.88 times more return on investment than Enerpac Tool. However, Ametek Inc is 1.13 times less risky than Enerpac Tool. It trades about 0.36 of its potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.17 per unit of risk. If you would invest 16,805 in Ametek Inc on August 27, 2024 and sell it today you would earn a total of 2,933 from holding Ametek Inc or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ametek Inc vs. Enerpac Tool Group
Performance |
| Timeline |
| Ametek Inc |
| Enerpac Tool Group |
Ametek and Enerpac Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ametek and Enerpac Tool
The main advantage of trading using opposite Ametek and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek position performs unexpectedly, Enerpac Tool 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 Enerpac Tool will offset losses from the drop in Enerpac Tool's long position.The idea behind Ametek Inc and Enerpac Tool Group 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.| Enerpac Tool vs. Aquagold International | Enerpac Tool vs. Morningstar Unconstrained Allocation | Enerpac Tool vs. High Yield Municipal Fund | Enerpac Tool vs. Thrivent High Yield |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |