Correlation Between China Yuchai and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both China Yuchai 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 China Yuchai and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Yuchai International and Enerpac Tool Group, you can compare the effects of market volatilities on China Yuchai 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 China Yuchai with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Enerpac Tool.
Diversification Opportunities for China Yuchai and Enerpac Tool
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Enerpac is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International 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 China Yuchai 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 China Yuchai International 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 China Yuchai i.e., China Yuchai and Enerpac Tool go up and down completely randomly.
Pair Corralation between China Yuchai and Enerpac Tool
Considering the 90-day investment horizon China Yuchai International is expected to under-perform the Enerpac Tool. But the stock apears to be less risky and, when comparing its historical volatility, China Yuchai International is 1.16 times less risky than Enerpac Tool. The stock trades about -0.51 of its potential returns per unit of risk. The Enerpac Tool Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,371 in Enerpac Tool Group on August 23, 2024 and sell it today you would earn a total of 418.00 from holding Enerpac Tool Group or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. Enerpac Tool Group
Performance |
| Timeline |
| China Yuchai Interna |
| Enerpac Tool Group |
China Yuchai and Enerpac Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Enerpac Tool
The main advantage of trading using opposite China Yuchai and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai 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.| China Yuchai vs. China Automotive Systems | China Yuchai vs. China Natural Resources | China Yuchai vs. Sonida Senior Living | China Yuchai vs. UTStarcom Holdings Corp |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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