Correlation Between Ocean Power and Enersys
Can any of the company-specific risk be diversified away by investing in both Ocean Power and Enersys 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 Ocean Power and Enersys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Power Technologies and Enersys, you can compare the effects of market volatilities on Ocean Power and Enersys 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 Ocean Power with a short position of Enersys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Power and Enersys.
Diversification Opportunities for Ocean Power and Enersys
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocean and Enersys is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Power Technologies and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys and Ocean Power 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 Ocean Power Technologies are associated (or correlated) with Enersys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersys has no effect on the direction of Ocean Power i.e., Ocean Power and Enersys go up and down completely randomly.
Pair Corralation between Ocean Power and Enersys
Given the investment horizon of 90 days Ocean Power Technologies is expected to generate 8.01 times more return on investment than Enersys. However, Ocean Power is 8.01 times more volatile than Enersys. It trades about 0.11 of its potential returns per unit of risk. Enersys is currently generating about -0.04 per unit of risk. If you would invest 19.00 in Ocean Power Technologies on August 31, 2024 and sell it today you would earn a total of 31.00 from holding Ocean Power Technologies or generate 163.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Power Technologies vs. Enersys
Performance |
| Timeline |
| Ocean Power Technologies |
| Enersys |
Ocean Power and Enersys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Power and Enersys
The main advantage of trading using opposite Ocean Power and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Power position performs unexpectedly, Enersys 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 Enersys will offset losses from the drop in Enersys' long position.| Ocean Power vs. Pioneer Power Solutions | Ocean Power vs. CBAK Energy Technology | Ocean Power vs. Ideal Power | Ocean Power vs. Expion360 |
| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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