Correlation Between Enersys and Hayward Holdings
Can any of the company-specific risk be diversified away by investing in both Enersys and Hayward Holdings 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 Hayward Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersys and Hayward Holdings, you can compare the effects of market volatilities on Enersys and Hayward Holdings 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 Hayward Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersys and Hayward Holdings.
Diversification Opportunities for Enersys and Hayward Holdings
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enersys and Hayward is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Hayward Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hayward 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 Hayward Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hayward Holdings has no effect on the direction of Enersys i.e., Enersys and Hayward Holdings go up and down completely randomly.
Pair Corralation between Enersys and Hayward Holdings
Considering the 90-day investment horizon Enersys is expected to generate 54.53 times less return on investment than Hayward Holdings. But when comparing it to its historical volatility, Enersys is 1.31 times less risky than Hayward Holdings. It trades about 0.0 of its potential returns per unit of risk. Hayward Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,258 in Hayward Holdings on August 28, 2024 and sell it today you would earn a total of 382.00 from holding Hayward Holdings or generate 30.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enersys vs. Hayward Holdings
Performance |
| Timeline |
| Enersys |
| Hayward Holdings |
Enersys and Hayward Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersys and Hayward Holdings
The main advantage of trading using opposite Enersys and Hayward Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys position performs unexpectedly, Hayward Holdings 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 Hayward Holdings will offset losses from the drop in Hayward Holdings' long position.| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
| Hayward Holdings vs. Kimball Electronics | Hayward Holdings vs. Enersys | Hayward Holdings vs. Espey Mfg Electronics | Hayward Holdings vs. Energizer 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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