Correlation Between GrafTech International and Enovix Corp
Can any of the company-specific risk be diversified away by investing in both GrafTech International and Enovix Corp 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 GrafTech International and Enovix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrafTech International and Enovix Corp, you can compare the effects of market volatilities on GrafTech International and Enovix Corp 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 GrafTech International with a short position of Enovix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrafTech International and Enovix Corp.
Diversification Opportunities for GrafTech International and Enovix Corp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GrafTech and Enovix is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GrafTech International and Enovix Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enovix Corp and GrafTech International 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 GrafTech International are associated (or correlated) with Enovix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enovix Corp has no effect on the direction of GrafTech International i.e., GrafTech International and Enovix Corp go up and down completely randomly.
Pair Corralation between GrafTech International and Enovix Corp
Considering the 90-day investment horizon GrafTech International is expected to generate 0.97 times more return on investment than Enovix Corp. However, GrafTech International is 1.04 times less risky than Enovix Corp. It trades about 0.01 of its potential returns per unit of risk. Enovix Corp is currently generating about 0.01 per unit of risk. If you would invest 264.00 in GrafTech International on August 27, 2024 and sell it today you would lose (56.00) from holding GrafTech International or give up 21.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrafTech International vs. Enovix Corp
Performance |
| Timeline |
| GrafTech International |
| Enovix Corp |
GrafTech International and Enovix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrafTech International and Enovix Corp
The main advantage of trading using opposite GrafTech International and Enovix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrafTech International position performs unexpectedly, Enovix Corp 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 Enovix Corp will offset losses from the drop in Enovix Corp's long position.| GrafTech International vs. Kimball Electronics | GrafTech International vs. Hayward Holdings | GrafTech International vs. Enersys | GrafTech International vs. Espey Mfg Electronics |
| Enovix Corp vs. Bloom Energy Corp | Enovix Corp vs. Eos Energy Enterprises | Enovix Corp vs. Sunrise New Energy | Enovix Corp vs. Flux Power Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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