Correlation Between Enerpac Tool and Hillenbrand
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Hillenbrand 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 Hillenbrand 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 Hillenbrand, you can compare the effects of market volatilities on Enerpac Tool and Hillenbrand 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 Hillenbrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Hillenbrand.
Diversification Opportunities for Enerpac Tool and Hillenbrand
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enerpac and Hillenbrand is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand 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 Hillenbrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillenbrand has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Hillenbrand go up and down completely randomly.
Pair Corralation between Enerpac Tool and Hillenbrand
Given the investment horizon of 90 days Enerpac Tool is expected to generate 2.22 times less return on investment than Hillenbrand. But when comparing it to its historical volatility, Enerpac Tool Group is 1.01 times less risky than Hillenbrand. It trades about 0.25 of its potential returns per unit of risk. Hillenbrand is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 3,074 in Hillenbrand on October 25, 2024 and sell it today you would earn a total of 443.00 from holding Hillenbrand or generate 14.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Hillenbrand
Performance |
| Timeline |
| Enerpac Tool Group |
| Hillenbrand |
Enerpac Tool and Hillenbrand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Hillenbrand
The main advantage of trading using opposite Enerpac Tool and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Hillenbrand 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 Hillenbrand will offset losses from the drop in Hillenbrand's long position.| Enerpac Tool vs. Omega Flex | Enerpac Tool vs. Luxfer Holdings PLC | Enerpac Tool vs. Gorman Rupp | Enerpac Tool vs. CSW Industrials |
| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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