Correlation Between Enpro Industries and Middleby Corp
Can any of the company-specific risk be diversified away by investing in both Enpro Industries and Middleby Corp 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 Enpro Industries and Middleby Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enpro Industries and Middleby Corp, you can compare the effects of market volatilities on Enpro Industries and Middleby Corp 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 Enpro Industries with a short position of Middleby Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enpro Industries and Middleby Corp.
Diversification Opportunities for Enpro Industries and Middleby Corp
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enpro and Middleby is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Enpro Industries and Middleby Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middleby Corp and Enpro Industries 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 Enpro Industries are associated (or correlated) with Middleby Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middleby Corp has no effect on the direction of Enpro Industries i.e., Enpro Industries and Middleby Corp go up and down completely randomly.
Pair Corralation between Enpro Industries and Middleby Corp
Considering the 90-day investment horizon Enpro Industries is expected to generate 1.17 times more return on investment than Middleby Corp. However, Enpro Industries is 1.17 times more volatile than Middleby Corp. It trades about 0.14 of its potential returns per unit of risk. Middleby Corp is currently generating about 0.05 per unit of risk. If you would invest 15,754 in Enpro Industries on August 28, 2024 and sell it today you would earn a total of 3,149 from holding Enpro Industries or generate 19.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enpro Industries vs. Middleby Corp
Performance |
| Timeline |
| Enpro Industries |
| Middleby Corp |
Enpro Industries and Middleby Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enpro Industries and Middleby Corp
The main advantage of trading using opposite Enpro Industries and Middleby Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enpro Industries position performs unexpectedly, Middleby Corp 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 Middleby Corp will offset losses from the drop in Middleby Corp's long position.| Enpro Industries vs. Helios Technologies | Enpro Industries vs. Omega Flex | Enpro Industries vs. Luxfer Holdings PLC | Enpro Industries vs. Hurco Companies |
| Middleby Corp vs. Aquagold International | Middleby Corp vs. Morningstar Unconstrained Allocation | Middleby Corp vs. High Yield Municipal Fund | Middleby Corp vs. Thrivent High Yield |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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