Correlation Between Enersys and Anterix

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

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

Diversification Opportunities for Enersys and Anterix

0.4

Correlation Coefficient

Enersys  Anterix

Very weak diversification

The 3 months correlation between Enersys and Anterix is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix and Enersys 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 Enersys are associated (or correlated) with Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Enersys i.e., Enersys and Anterix go up and down completely randomly.

Pair Corralation between Enersys and Anterix

Considering the 90-day investment horizon Enersys is expected to generate 0.75 times more return on investment than Anterix. However, Enersys is 1.33 times less risky than Anterix. It trades about 0.03 of its potential returns per unit of risk. Anterix is currently generating about 0.0 per unit of risk. If you would invest  7,935  in Enersys on October 3, 2024 and sell it today you would earn a total of  1,308  from holding Enersys or generate 16.48% return on investment over 90 days.

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

Enersys  vs.  Anterix

Enersys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enersys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Enersys is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Enersys and Anterix

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

The idea behind Enersys and Anterix 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.