Correlation Between Enersys and Flux Power
Can any of the company-specific risk be diversified away by investing in both Enersys and Flux Power 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 Flux Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersys and Flux Power Holdings, you can compare the effects of market volatilities on Enersys and Flux Power 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 Flux Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersys and Flux Power.
Diversification Opportunities for Enersys and Flux Power
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enersys and Flux is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Flux Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flux Power Holdings 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 Flux Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flux Power Holdings has no effect on the direction of Enersys i.e., Enersys and Flux Power go up and down completely randomly.
Pair Corralation between Enersys and Flux Power
Considering the 90-day investment horizon Enersys is expected to generate 0.27 times more return on investment than Flux Power. However, Enersys is 3.72 times less risky than Flux Power. It trades about 0.02 of its potential returns per unit of risk. Flux Power Holdings is currently generating about -0.1 per unit of risk. If you would invest 9,715 in Enersys on November 1, 2024 and sell it today you would earn a total of 103.00 from holding Enersys or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enersys vs. Flux Power Holdings
Performance |
| Timeline |
| Enersys |
| Flux Power Holdings |
Enersys and Flux Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersys and Flux Power
The main advantage of trading using opposite Enersys and Flux Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys position performs unexpectedly, Flux Power 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 Flux Power will offset losses from the drop in Flux Power's long position.| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
| Flux Power vs. Espey Mfg Electronics | Flux Power vs. NeoVolta Warrant | Flux Power vs. Kimball Electronics | Flux Power vs. Hayward 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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