Correlation Between Preformed Line and Enersys
Can any of the company-specific risk be diversified away by investing in both Preformed Line 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 Preformed Line and Enersys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Preformed Line Products and Enersys, you can compare the effects of market volatilities on Preformed Line 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 Preformed Line with a short position of Enersys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Preformed Line and Enersys.
Diversification Opportunities for Preformed Line and Enersys
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Preformed and Enersys is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Preformed Line Products and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys and Preformed Line 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 Preformed Line Products 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 Preformed Line i.e., Preformed Line and Enersys go up and down completely randomly.
Pair Corralation between Preformed Line and Enersys
Given the investment horizon of 90 days Preformed Line Products is expected to generate 1.3 times more return on investment than Enersys. However, Preformed Line is 1.3 times more volatile than Enersys. It trades about 0.18 of its potential returns per unit of risk. Enersys is currently generating about -0.07 per unit of risk. If you would invest 12,630 in Preformed Line Products on August 27, 2024 and sell it today you would earn a total of 1,222 from holding Preformed Line Products or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Preformed Line Products vs. Enersys
Performance |
| Timeline |
| Preformed Line Products |
| Enersys |
Preformed Line and Enersys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Preformed Line and Enersys
The main advantage of trading using opposite Preformed Line and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Preformed Line 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.| Preformed Line vs. Kimball Electronics | Preformed Line vs. nVent Electric PLC | Preformed Line vs. Espey Mfg Electronics | Preformed Line vs. Hubbell |
| Enersys vs. Bloom Energy Corp | Enersys vs. Eos Energy Enterprises | Enersys vs. Sunrise New Energy | Enersys vs. Flux Power Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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