Correlation Between Atkore International and Energizer Holdings

Can any of the company-specific risk be diversified away by investing in both Atkore International and Energizer Holdings 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 Atkore International and Energizer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atkore International Group and Energizer Holdings, you can compare the effects of market volatilities on Atkore International and Energizer Holdings 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 Atkore International with a short position of Energizer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atkore International and Energizer Holdings.

Diversification Opportunities for Atkore International and Energizer Holdings

0.51

Correlation Coefficient

Atkore International  Energizer Holdings

Very weak diversification

The 3 months correlation between Atkore and Energizer is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Atkore International Group and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings and Atkore International 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 Atkore International Group are associated (or correlated) with Energizer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energizer Holdings has no effect on the direction of Atkore International i.e., Atkore International and Energizer Holdings go up and down completely randomly.

Pair Corralation between Atkore International and Energizer Holdings

Given the investment horizon of 90 days Atkore International is expected to generate 3.82 times less return on investment than Energizer Holdings. In addition to that, Atkore International is 1.86 times more volatile than Energizer Holdings. It trades about 0.04 of its total potential returns per unit of risk. Energizer Holdings is currently generating about 0.29 per unit of volatility. If you would invest  2,864  in Energizer Holdings on September 12, 2024 and sell it today you would earn a total of  909.00  from holding Energizer Holdings or generate 31.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Atkore International Group  vs.  Energizer Holdings

Atkore International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atkore International Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking signals, Atkore International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Energizer Holdings

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Energizer Holdings are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Energizer Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atkore International and Energizer Holdings

The main advantage of trading using opposite Atkore International and Energizer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atkore International position performs unexpectedly, Energizer Holdings 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 Energizer Holdings will offset losses from the drop in Energizer Holdings' long position.

The idea behind Atkore International Group and Energizer Holdings 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.