Correlation Between Enersys and RF Industries
Can any of the company-specific risk be diversified away by investing in both Enersys and RF Industries 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 RF Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersys and RF Industries, you can compare the effects of market volatilities on Enersys and RF Industries 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 RF Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersys and RF Industries.
Diversification Opportunities for Enersys and RF Industries
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enersys and RFIL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and RF Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Industries 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 RF Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Industries has no effect on the direction of Enersys i.e., Enersys and RF Industries go up and down completely randomly.
Pair Corralation between Enersys and RF Industries
Considering the 90-day investment horizon Enersys is expected to under-perform the RF Industries. But the stock apears to be less risky and, when comparing its historical volatility, Enersys is 1.68 times less risky than RF Industries. The stock trades about -0.04 of its potential returns per unit of risk. The RF Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 319.00 in RF Industries on September 2, 2024 and sell it today you would earn a total of 105.00 from holding RF Industries or generate 32.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enersys vs. RF Industries
Performance |
| Timeline |
| Enersys |
| RF Industries |
Enersys and RF Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersys and RF Industries
The main advantage of trading using opposite Enersys and RF Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys position performs unexpectedly, RF Industries 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 RF Industries will offset losses from the drop in RF Industries' long position.| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
| RF Industries vs. Nortech Systems Incorporated | RF Industries vs. Richardson Electronics | RF Industries vs. AstroNova |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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