Correlation Between Enersys and Coty
Can any of the company-specific risk be diversified away by investing in both Enersys and Coty 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 Enersys and Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersys and Coty Inc, you can compare the effects of market volatilities on Enersys and Coty 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 Enersys with a short position of Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersys and Coty.
Diversification Opportunities for Enersys and Coty
Weak diversification
The 3 months correlation between Enersys and Coty is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc and Enersys 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 Enersys are associated (or correlated) with Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Enersys i.e., Enersys and Coty go up and down completely randomly.
Pair Corralation between Enersys and Coty
Considering the 90-day investment horizon Enersys is expected to generate 0.87 times more return on investment than Coty. However, Enersys is 1.15 times less risky than Coty. It trades about 0.03 of its potential returns per unit of risk. Coty Inc is currently generating about -0.08 per unit of risk. If you would invest 8,748 in Enersys on August 25, 2024 and sell it today you would earn a total of 1,004 from holding Enersys or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enersys vs. Coty Inc
Performance |
| Timeline |
| Enersys |
| Coty Inc |
Enersys and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersys and Coty
The main advantage of trading using opposite Enersys and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |