Correlation Between Dow Jones and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Enerpac Tool Group, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Enerpac Tool.
Diversification Opportunities for Dow Jones and Enerpac Tool
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Enerpac is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Enerpac Tool go up and down completely randomly.
Pair Corralation between Dow Jones and Enerpac Tool
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.76 times less return on investment than Enerpac Tool. But when comparing it to its historical volatility, Dow Jones Industrial is 2.22 times less risky than Enerpac Tool. It trades about 0.2 of its potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,428 in Enerpac Tool Group on November 18, 2024 and sell it today you would earn a total of 186.00 from holding Enerpac Tool Group or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Enerpac Tool Group
Performance |
| Timeline |
Dow Jones and Enerpac Tool Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Enerpac Tool Group
Pair trading matchups for Enerpac Tool
Pair Trading with Dow Jones and Enerpac Tool
The main advantage of trading using opposite Dow Jones and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Palomar Holdings | Dow Jones vs. Mesa Air Group | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Unum Group |
| Enerpac Tool vs. Omega Flex | Enerpac Tool vs. Luxfer Holdings PLC | Enerpac Tool vs. Gorman Rupp | Enerpac Tool vs. CSW Industrials |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |