Correlation Between Enerpac Tool and Graco
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Graco 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 Graco 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 Graco Inc, you can compare the effects of market volatilities on Enerpac Tool and Graco 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 Graco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Graco.
Diversification Opportunities for Enerpac Tool and Graco
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enerpac and Graco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Graco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graco Inc 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 Graco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graco Inc has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Graco go up and down completely randomly.
Pair Corralation between Enerpac Tool and Graco
Given the investment horizon of 90 days Enerpac Tool is expected to generate 6.02 times less return on investment than Graco. In addition to that, Enerpac Tool is 1.56 times more volatile than Graco Inc. It trades about 0.01 of its total potential returns per unit of risk. Graco Inc is currently generating about 0.08 per unit of volatility. If you would invest 8,119 in Graco Inc on October 26, 2024 and sell it today you would earn a total of 449.00 from holding Graco Inc or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Graco Inc
Performance |
| Timeline |
| Enerpac Tool Group |
| Graco Inc |
Enerpac Tool and Graco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Graco
The main advantage of trading using opposite Enerpac Tool and Graco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Graco 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 Graco will offset losses from the drop in Graco's long position.| Enerpac Tool vs. Aquagold International | Enerpac Tool vs. Morningstar Unconstrained Allocation | Enerpac Tool vs. Thrivent High Yield | Enerpac Tool vs. High Yield Municipal Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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