Correlation Between Enerpac Tool and Mueller Water
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Mueller Water 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 Mueller Water 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 Mueller Water Products, you can compare the effects of market volatilities on Enerpac Tool and Mueller Water 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 Mueller Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Mueller Water.
Diversification Opportunities for Enerpac Tool and Mueller Water
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enerpac and Mueller is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Mueller Water Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Water Products 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 Mueller Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Water Products has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Mueller Water go up and down completely randomly.
Pair Corralation between Enerpac Tool and Mueller Water
Given the investment horizon of 90 days Enerpac Tool is expected to generate 1.18 times less return on investment than Mueller Water. But when comparing it to its historical volatility, Enerpac Tool Group is 1.06 times less risky than Mueller Water. It trades about 0.09 of its potential returns per unit of risk. Mueller Water Products is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,102 in Mueller Water Products on August 27, 2024 and sell it today you would earn a total of 1,416 from holding Mueller Water Products or generate 128.49% 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. Mueller Water Products
Performance |
| Timeline |
| Enerpac Tool Group |
| Mueller Water Products |
Enerpac Tool and Mueller Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Mueller Water
The main advantage of trading using opposite Enerpac Tool and Mueller Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Mueller Water 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 Mueller Water will offset losses from the drop in Mueller Water'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 |
| Mueller Water vs. Enerpac Tool Group | Mueller Water vs. Luxfer Holdings PLC | Mueller Water vs. John Bean Technologies | Mueller Water vs. CSW Industrials |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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