Correlation Between Enpro Industries and Vestas Wind
Can any of the company-specific risk be diversified away by investing in both Enpro Industries and Vestas Wind 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 Vestas Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enpro Industries and Vestas Wind Systems, you can compare the effects of market volatilities on Enpro Industries and Vestas Wind 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 Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enpro Industries and Vestas Wind.
Diversification Opportunities for Enpro Industries and Vestas Wind
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enpro and Vestas is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Enpro Industries and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Enpro Industries i.e., Enpro Industries and Vestas Wind go up and down completely randomly.
Pair Corralation between Enpro Industries and Vestas Wind
Considering the 90-day investment horizon Enpro Industries is expected to generate 0.33 times more return on investment than Vestas Wind. However, Enpro Industries is 3.0 times less risky than Vestas Wind. It trades about 0.37 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.07 per unit of risk. If you would invest 16,984 in Enpro Industries on November 7, 2024 and sell it today you would earn a total of 1,825 from holding Enpro Industries or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enpro Industries vs. Vestas Wind Systems
Performance |
| Timeline |
| Enpro Industries |
| Vestas Wind Systems |
Enpro Industries and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enpro Industries and Vestas Wind
The main advantage of trading using opposite Enpro Industries and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enpro Industries position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.| Enpro Industries vs. Helios Technologies | Enpro Industries vs. Omega Flex | Enpro Industries vs. Luxfer Holdings PLC | Enpro Industries vs. Hurco Companies |
| Vestas Wind vs. KONE Oyj | Vestas Wind vs. Spirax Sarco Engineering PLC | Vestas Wind vs. Atlas Copco ADR | Vestas Wind vs. IDEX Corporation |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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