Correlation Between Enerpac Tool and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Nel ASA 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 Nel ASA 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 Nel ASA, you can compare the effects of market volatilities on Enerpac Tool and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Nel ASA.
Diversification Opportunities for Enerpac Tool and Nel ASA
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enerpac and Nel is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Nel ASA go up and down completely randomly.
Pair Corralation between Enerpac Tool and Nel ASA
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.73 times more return on investment than Nel ASA. However, Enerpac Tool Group is 1.38 times less risky than Nel ASA. It trades about 0.18 of its potential returns per unit of risk. Nel ASA is currently generating about -0.36 per unit of risk. If you would invest 4,426 in Enerpac Tool Group on September 2, 2024 and sell it today you would earn a total of 400.00 from holding Enerpac Tool Group or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Nel ASA
Performance |
| Timeline |
| Enerpac Tool Group |
| Nel ASA |
Enerpac Tool and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Nel ASA
The main advantage of trading using opposite Enerpac Tool and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| Enerpac Tool vs. Omega Flex | Enerpac Tool vs. Luxfer Holdings PLC | Enerpac Tool vs. Gorman Rupp | Enerpac Tool vs. John Bean Technologies |
| Nel ASA vs. GE Aerospace | Nel ASA vs. Eaton PLC | Nel ASA vs. Parker Hannifin | Nel ASA vs. Illinois Tool Works |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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