Correlation Between Enerpac Tool and Tennant
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Tennant 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 Tennant 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 Tennant Company, you can compare the effects of market volatilities on Enerpac Tool and Tennant 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 Tennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Tennant.
Diversification Opportunities for Enerpac Tool and Tennant
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enerpac and Tennant is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Tennant Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tennant Company 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 Tennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tennant Company has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Tennant go up and down completely randomly.
Pair Corralation between Enerpac Tool and Tennant
Given the investment horizon of 90 days Enerpac Tool is expected to generate 1.51 times less return on investment than Tennant. In addition to that, Enerpac Tool is 1.22 times more volatile than Tennant Company. It trades about 0.15 of its total potential returns per unit of risk. Tennant Company is currently generating about 0.28 per unit of volatility. If you would invest 8,152 in Tennant Company on October 26, 2024 and sell it today you would earn a total of 487.00 from holding Tennant Company or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Enerpac Tool Group vs. Tennant Company
Performance |
| Timeline |
| Enerpac Tool Group |
| Tennant Company |
Enerpac Tool and Tennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Tennant
The main advantage of trading using opposite Enerpac Tool and Tennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Tennant 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 Tennant will offset losses from the drop in Tennant's long position.| Enerpac Tool vs. Aquagold International | Enerpac Tool vs. Morningstar Unconstrained Allocation | Enerpac Tool vs. Thrivent High Yield | Enerpac Tool vs. High Yield Municipal Fund |
| Tennant vs. Franklin Electric Co | Tennant vs. Omega Flex | Tennant vs. Luxfer Holdings PLC | Tennant vs. Kadant 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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