Correlation Between CVD Equipment and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both CVD Equipment 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 CVD Equipment and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVD Equipment and Enerpac Tool Group, you can compare the effects of market volatilities on CVD Equipment 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 CVD Equipment with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVD Equipment and Enerpac Tool.
Diversification Opportunities for CVD Equipment and Enerpac Tool
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CVD and Enerpac is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CVD Equipment 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 CVD Equipment 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 CVD Equipment 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 CVD Equipment i.e., CVD Equipment and Enerpac Tool go up and down completely randomly.
Pair Corralation between CVD Equipment and Enerpac Tool
Considering the 90-day investment horizon CVD Equipment is expected to under-perform the Enerpac Tool. In addition to that, CVD Equipment is 1.87 times more volatile than Enerpac Tool Group. It trades about -0.1 of its total potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.15 per unit of volatility. If you would invest 4,067 in Enerpac Tool Group on August 23, 2024 and sell it today you would earn a total of 722.00 from holding Enerpac Tool Group or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVD Equipment vs. Enerpac Tool Group
Performance |
| Timeline |
| CVD Equipment |
| Enerpac Tool Group |
CVD Equipment and Enerpac Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVD Equipment and Enerpac Tool
The main advantage of trading using opposite CVD Equipment and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVD Equipment 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.| CVD Equipment vs. Standex International | CVD Equipment vs. Intevac | CVD Equipment vs. Thermon Group Holdings | CVD Equipment vs. Enpro Industries |
| Enerpac Tool vs. Omega Flex | Enerpac Tool vs. Luxfer Holdings PLC | Enerpac Tool vs. Gorman Rupp | Enerpac Tool vs. John Bean Technologies |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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