Correlation Between Enerpac Tool and Next Hydrogen
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Next Hydrogen 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 Next Hydrogen 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 Next Hydrogen Solutions, you can compare the effects of market volatilities on Enerpac Tool and Next Hydrogen 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 Next Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Next Hydrogen.
Diversification Opportunities for Enerpac Tool and Next Hydrogen
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enerpac and Next is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Next Hydrogen Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Hydrogen Solutions 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 Next Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Hydrogen Solutions has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Next Hydrogen go up and down completely randomly.
Pair Corralation between Enerpac Tool and Next Hydrogen
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.26 times more return on investment than Next Hydrogen. However, Enerpac Tool Group is 3.9 times less risky than Next Hydrogen. It trades about 0.18 of its potential returns per unit of risk. Next Hydrogen Solutions is currently generating about -0.11 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. Next Hydrogen Solutions
Performance |
| Timeline |
| Enerpac Tool Group |
| Next Hydrogen Solutions |
Enerpac Tool and Next Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Next Hydrogen
The main advantage of trading using opposite Enerpac Tool and Next Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Next Hydrogen 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 Next Hydrogen will offset losses from the drop in Next Hydrogen'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 |
| Next Hydrogen vs. Weir Group PLC | Next Hydrogen vs. Greenshift Corp | Next Hydrogen vs. Quality Industrial Corp | Next Hydrogen vs. ITM Power Plc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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