Correlation Between Enerpac Tool and SCI Engineered
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and SCI Engineered 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 SCI Engineered 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 SCI Engineered Materials, you can compare the effects of market volatilities on Enerpac Tool and SCI Engineered 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 SCI Engineered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and SCI Engineered.
Diversification Opportunities for Enerpac Tool and SCI Engineered
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enerpac and SCI is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and SCI Engineered Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Engineered Materials 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 SCI Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Engineered Materials has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and SCI Engineered go up and down completely randomly.
Pair Corralation between Enerpac Tool and SCI Engineered
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 1.17 times more return on investment than SCI Engineered. However, Enerpac Tool is 1.17 times more volatile than SCI Engineered Materials. It trades about 0.18 of its potential returns per unit of risk. SCI Engineered Materials is currently generating about 0.15 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerpac Tool Group vs. SCI Engineered Materials
Performance |
| Timeline |
| Enerpac Tool Group |
| SCI Engineered Materials |
Enerpac Tool and SCI Engineered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and SCI Engineered
The main advantage of trading using opposite Enerpac Tool and SCI Engineered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, SCI Engineered 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 SCI Engineered will offset losses from the drop in SCI Engineered'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 |
| SCI Engineered vs. Ultra Clean Holdings | SCI Engineered vs. Amtech Systems | SCI Engineered vs. Veeco Instruments | SCI Engineered vs. Cohu Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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