Correlation Between Enerpac Tool and China Yuchai
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and China Yuchai 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 China Yuchai 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 China Yuchai International, you can compare the effects of market volatilities on Enerpac Tool and China Yuchai 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 China Yuchai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and China Yuchai.
Diversification Opportunities for Enerpac Tool and China Yuchai
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enerpac and China is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and China Yuchai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Yuchai Interna 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 China Yuchai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yuchai Interna has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and China Yuchai go up and down completely randomly.
Pair Corralation between Enerpac Tool and China Yuchai
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.77 times more return on investment than China Yuchai. However, Enerpac Tool Group is 1.29 times less risky than China Yuchai. It trades about 0.16 of its potential returns per unit of risk. China Yuchai International is currently generating about 0.03 per unit of risk. If you would invest 2,727 in Enerpac Tool Group on August 26, 2024 and sell it today you would earn a total of 2,147 from holding Enerpac Tool Group or generate 78.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. China Yuchai International
Performance |
| Timeline |
| Enerpac Tool Group |
| China Yuchai Interna |
Enerpac Tool and China Yuchai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and China Yuchai
The main advantage of trading using opposite Enerpac Tool and China Yuchai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, China Yuchai 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 China Yuchai will offset losses from the drop in China Yuchai'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 |
| China Yuchai vs. China Natural Resources | China Yuchai vs. Sonida Senior Living | China Yuchai vs. UTStarcom Holdings Corp | China Yuchai vs. Deswell Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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