Correlation Between Enpro Industries and Regal Beloit
Can any of the company-specific risk be diversified away by investing in both Enpro Industries and Regal Beloit 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 Regal Beloit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enpro Industries and Regal Beloit, you can compare the effects of market volatilities on Enpro Industries and Regal Beloit 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 Regal Beloit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enpro Industries and Regal Beloit.
Diversification Opportunities for Enpro Industries and Regal Beloit
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enpro and Regal is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Enpro Industries and Regal Beloit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Beloit 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 Regal Beloit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Beloit has no effect on the direction of Enpro Industries i.e., Enpro Industries and Regal Beloit go up and down completely randomly.
Pair Corralation between Enpro Industries and Regal Beloit
Considering the 90-day investment horizon Enpro Industries is expected to generate 0.97 times more return on investment than Regal Beloit. However, Enpro Industries is 1.03 times less risky than Regal Beloit. It trades about 0.1 of its potential returns per unit of risk. Regal Beloit is currently generating about 0.08 per unit of risk. If you would invest 14,806 in Enpro Industries on September 2, 2024 and sell it today you would earn a total of 4,104 from holding Enpro Industries or generate 27.72% 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. Regal Beloit
Performance |
| Timeline |
| Enpro Industries |
| Regal Beloit |
Enpro Industries and Regal Beloit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enpro Industries and Regal Beloit
The main advantage of trading using opposite Enpro Industries and Regal Beloit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enpro Industries position performs unexpectedly, Regal Beloit 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 Regal Beloit will offset losses from the drop in Regal Beloit's long position.| Enpro Industries vs. Helios Technologies | Enpro Industries vs. Omega Flex | Enpro Industries vs. Luxfer Holdings PLC | Enpro Industries vs. Hurco Companies |
| Regal Beloit vs. IDEX Corporation | Regal Beloit vs. Watts Water Technologies | Regal Beloit vs. Donaldson | Regal Beloit vs. Gorman Rupp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |