Correlation Between Enerpac Tool and Crane NXT
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Crane NXT 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 Crane NXT 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 Crane NXT Co, you can compare the effects of market volatilities on Enerpac Tool and Crane NXT 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 Crane NXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Crane NXT.
Diversification Opportunities for Enerpac Tool and Crane NXT
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enerpac and Crane is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Crane NXT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane NXT 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 Crane NXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane NXT has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Crane NXT go up and down completely randomly.
Pair Corralation between Enerpac Tool and Crane NXT
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.96 times more return on investment than Crane NXT. However, Enerpac Tool Group is 1.04 times less risky than Crane NXT. It trades about 0.11 of its potential returns per unit of risk. Crane NXT Co is currently generating about 0.04 per unit of risk. If you would invest 2,363 in Enerpac Tool Group on August 27, 2024 and sell it today you would earn a total of 2,511 from holding Enerpac Tool Group or generate 106.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Crane NXT Co
Performance |
| Timeline |
| Enerpac Tool Group |
| Crane NXT |
Enerpac Tool and Crane NXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Crane NXT
The main advantage of trading using opposite Enerpac Tool and Crane NXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Crane NXT 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 Crane NXT will offset losses from the drop in Crane NXT'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 |
| Crane NXT vs. Donaldson | Crane NXT vs. ITT Inc | Crane NXT vs. Franklin Electric Co | Crane NXT vs. Enerpac Tool Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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