Correlation Between Enerpac Tool and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Ballard 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 Enerpac Tool and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerpac Tool Group and Ballard Power Systems, you can compare the effects of market volatilities on Enerpac Tool and Ballard 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 Enerpac Tool with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Ballard Power.
Diversification Opportunities for Enerpac Tool and Ballard Power
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enerpac and Ballard is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Enerpac Tool 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 Enerpac Tool Group are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Ballard Power go up and down completely randomly.
Pair Corralation between Enerpac Tool and Ballard Power
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.44 times more return on investment than Ballard Power. However, Enerpac Tool Group is 2.26 times less risky than Ballard Power. It trades about 0.21 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.12 per unit of risk. If you would invest 4,374 in Enerpac Tool Group on August 25, 2024 and sell it today you would earn a total of 500.00 from holding Enerpac Tool Group or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Ballard Power Systems
Performance |
| Timeline |
| Enerpac Tool Group |
| Ballard Power Systems |
Enerpac Tool and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Ballard Power
The main advantage of trading using opposite Enerpac Tool and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Ballard 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Enerpac Tool vs. Aquagold International | Enerpac Tool vs. Morningstar Unconstrained Allocation | Enerpac Tool vs. High Yield Municipal Fund | Enerpac Tool vs. Thrivent High Yield |
| Ballard Power vs. Emerson Electric | Ballard Power vs. Eaton PLC | Ballard Power vs. Parker Hannifin | Ballard Power vs. Illinois Tool Works |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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