Correlation Between Enerpac Tool and Illinois Tool
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Illinois Tool 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 Illinois Tool 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 Illinois Tool Works, you can compare the effects of market volatilities on Enerpac Tool and Illinois Tool 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 Illinois Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Illinois Tool.
Diversification Opportunities for Enerpac Tool and Illinois Tool
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enerpac and Illinois is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Illinois Tool Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illinois Tool Works 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 Illinois Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illinois Tool Works has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Illinois Tool go up and down completely randomly.
Pair Corralation between Enerpac Tool and Illinois Tool
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 1.52 times more return on investment than Illinois Tool. However, Enerpac Tool is 1.52 times more volatile than Illinois Tool Works. It trades about 0.09 of its potential returns per unit of risk. Illinois Tool Works is currently generating about 0.05 per unit of risk. If you would invest 2,427 in Enerpac Tool Group on August 27, 2024 and sell it today you would earn a total of 2,447 from holding Enerpac Tool Group or generate 100.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Illinois Tool Works
Performance |
| Timeline |
| Enerpac Tool Group |
| Illinois Tool Works |
Enerpac Tool and Illinois Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Illinois Tool
The main advantage of trading using opposite Enerpac Tool and Illinois Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Illinois Tool 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 Illinois Tool will offset losses from the drop in Illinois Tool'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 |
| Illinois Tool vs. Aquagold International | Illinois Tool vs. Morningstar Unconstrained Allocation | Illinois Tool vs. High Yield Municipal Fund | Illinois Tool vs. Thrivent High Yield |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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