Correlation Between Franklin Electric and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both Franklin Electric and Enerpac Tool 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 Franklin Electric and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Electric Co and Enerpac Tool Group, you can compare the effects of market volatilities on Franklin Electric and Enerpac Tool 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 Franklin Electric with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Electric and Enerpac Tool.
Diversification Opportunities for Franklin Electric and Enerpac Tool
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Enerpac is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Electric Co and Enerpac Tool Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerpac Tool Group and Franklin Electric 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 Franklin Electric Co are associated (or correlated) with Enerpac Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerpac Tool Group has no effect on the direction of Franklin Electric i.e., Franklin Electric and Enerpac Tool go up and down completely randomly.
Pair Corralation between Franklin Electric and Enerpac Tool
Given the investment horizon of 90 days Franklin Electric is expected to generate 2.96 times less return on investment than Enerpac Tool. But when comparing it to its historical volatility, Franklin Electric Co is 1.35 times less risky than Enerpac Tool. It trades about 0.07 of its potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,428 in Enerpac Tool Group on November 18, 2024 and sell it today you would earn a total of 186.00 from holding Enerpac Tool Group or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Electric Co vs. Enerpac Tool Group
Performance |
| Timeline |
| Franklin Electric |
| Enerpac Tool Group |
Franklin Electric and Enerpac Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Electric and Enerpac Tool
The main advantage of trading using opposite Franklin Electric and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Electric position performs unexpectedly, Enerpac Tool 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 Enerpac Tool will offset losses from the drop in Enerpac Tool's long position.| Franklin Electric vs. Graco Inc | Franklin Electric vs. Ametek Inc | Franklin Electric vs. Flowserve | Franklin Electric vs. Donaldson |
| Enerpac Tool vs. Omega Flex | Enerpac Tool vs. Luxfer Holdings PLC | Enerpac Tool vs. Gorman Rupp | Enerpac Tool vs. CSW Industrials |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |