Correlation Between Enerpac Tool and Ingersoll Rand
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Ingersoll Rand 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 Ingersoll Rand 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 Ingersoll Rand, you can compare the effects of market volatilities on Enerpac Tool and Ingersoll Rand 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 Ingersoll Rand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Ingersoll Rand.
Diversification Opportunities for Enerpac Tool and Ingersoll Rand
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enerpac and Ingersoll is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Ingersoll Rand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingersoll Rand 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 Ingersoll Rand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingersoll Rand has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Ingersoll Rand go up and down completely randomly.
Pair Corralation between Enerpac Tool and Ingersoll Rand
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 1.51 times more return on investment than Ingersoll Rand. However, Enerpac Tool is 1.51 times more volatile than Ingersoll Rand. It trades about 0.19 of its potential returns per unit of risk. Ingersoll Rand is currently generating about 0.24 per unit of risk. If you would invest 4,481 in Enerpac Tool Group on August 28, 2024 and sell it today you would earn a total of 441.00 from holding Enerpac Tool Group or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Ingersoll Rand
Performance |
| Timeline |
| Enerpac Tool Group |
| Ingersoll Rand |
Enerpac Tool and Ingersoll Rand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Ingersoll Rand
The main advantage of trading using opposite Enerpac Tool and Ingersoll Rand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Ingersoll Rand 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 Ingersoll Rand will offset losses from the drop in Ingersoll Rand'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 |
| Ingersoll Rand vs. IDEX Corporation | Ingersoll Rand vs. Flowserve | Ingersoll Rand vs. Donaldson | Ingersoll Rand vs. Franklin Electric Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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