Correlation Between Pool and Enable IPC
Can any of the company-specific risk be diversified away by investing in both Pool and Enable IPC 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 Pool and Enable IPC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pool Corporation and Enable IPC, you can compare the effects of market volatilities on Pool and Enable IPC 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 Pool with a short position of Enable IPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and Enable IPC.
Diversification Opportunities for Pool and Enable IPC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pool and Enable is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. and Enable IPC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enable IPC and Pool 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 Pool Corporation are associated (or correlated) with Enable IPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enable IPC has no effect on the direction of Pool i.e., Pool and Enable IPC go up and down completely randomly.
Pair Corralation between Pool and Enable IPC
If you would invest 34,532 in Pool Corporation on September 12, 2024 and sell it today you would earn a total of 3,016 from holding Pool Corporation or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pool Corp. vs. Enable IPC
Performance |
| Timeline |
| Pool |
| Enable IPC |
Pool and Enable IPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and Enable IPC
The main advantage of trading using opposite Pool and Enable IPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool position performs unexpectedly, Enable IPC 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 Enable IPC will offset losses from the drop in Enable IPC's long position.The idea behind Pool Corporation and Enable IPC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enable IPC vs. Transportadora de Gas | Enable IPC vs. Summit Hotel Properties | Enable IPC vs. RCI Hospitality Holdings | Enable IPC vs. BJs Restaurants |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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