Correlation Between Enerpac Tool and POTOMAC
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By analyzing existing cross correlation between Enerpac Tool Group and POTOMAC ELEC PWR, you can compare the effects of market volatilities on Enerpac Tool and POTOMAC 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 POTOMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and POTOMAC.
Diversification Opportunities for Enerpac Tool and POTOMAC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Enerpac and POTOMAC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and POTOMAC ELEC PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POTOMAC ELEC PWR 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 POTOMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POTOMAC ELEC PWR has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and POTOMAC go up and down completely randomly.
Pair Corralation between Enerpac Tool and POTOMAC
Given the investment horizon of 90 days Enerpac Tool is expected to generate 1.95 times less return on investment than POTOMAC. But when comparing it to its historical volatility, Enerpac Tool Group is 1.23 times less risky than POTOMAC. It trades about 0.13 of its potential returns per unit of risk. POTOMAC ELEC PWR is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 8,330 in POTOMAC ELEC PWR on November 28, 2024 and sell it today you would earn a total of 434.00 from holding POTOMAC ELEC PWR or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
Enerpac Tool Group vs. POTOMAC ELEC PWR
Performance |
| Timeline |
| Enerpac Tool Group |
| POTOMAC ELEC PWR |
Enerpac Tool and POTOMAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and POTOMAC
The main advantage of trading using opposite Enerpac Tool and POTOMAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, POTOMAC 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 POTOMAC will offset losses from the drop in POTOMAC's long position.| Enerpac Tool vs. Omega Flex | Enerpac Tool vs. Luxfer Holdings PLC | Enerpac Tool vs. Gorman Rupp | Enerpac Tool vs. CSW Industrials |
| POTOMAC vs. CVR Partners LP | POTOMAC vs. Genuine Parts Co | POTOMAC vs. American Vanguard | POTOMAC vs. MYT Netherlands Parent |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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