Correlation Between CSW Industrials and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both CSW Industrials 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 CSW Industrials and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSW Industrials and Enerpac Tool Group, you can compare the effects of market volatilities on CSW Industrials 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 CSW Industrials with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSW Industrials and Enerpac Tool.
Diversification Opportunities for CSW Industrials and Enerpac Tool
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CSW and Enerpac is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CSW Industrials 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 CSW Industrials 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 CSW Industrials 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 CSW Industrials i.e., CSW Industrials and Enerpac Tool go up and down completely randomly.
Pair Corralation between CSW Industrials and Enerpac Tool
Given the investment horizon of 90 days CSW Industrials is expected to generate 0.84 times more return on investment than Enerpac Tool. However, CSW Industrials is 1.2 times less risky than Enerpac Tool. It trades about 0.35 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 36,705 in CSW Industrials on August 26, 2024 and sell it today you would earn a total of 5,961 from holding CSW Industrials or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSW Industrials vs. Enerpac Tool Group
Performance |
| Timeline |
| CSW Industrials |
| Enerpac Tool Group |
CSW Industrials and Enerpac Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSW Industrials and Enerpac Tool
The main advantage of trading using opposite CSW Industrials and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSW Industrials 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.| CSW Industrials vs. Enerpac Tool Group | CSW Industrials vs. Luxfer Holdings PLC | CSW Industrials vs. John Bean Technologies | CSW Industrials vs. ITT Inc |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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