Correlation Between Enovix Corp and Enersys

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

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

Diversification Opportunities for Enovix Corp and Enersys

-0.16

Correlation Coefficient

Enovix Corp  Enersys

Good diversification

The 3 months correlation between Enovix and Enersys is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys and Enovix Corp 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 Enovix Corp 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 Enovix Corp i.e., Enovix Corp and Enersys go up and down completely randomly.

Pair Corralation between Enovix Corp and Enersys

Given the investment horizon of 90 days Enovix Corp is expected to under-perform the Enersys. In addition to that, Enovix Corp is 3.33 times more volatile than Enersys. It trades about -0.07 of its total potential returns per unit of risk. Enersys is currently generating about 0.03 per unit of volatility. If you would invest  9,260  in Enersys on December 29, 2024 and sell it today you would earn a total of  214.00  from holding Enersys or generate 2.31% return on investment over 90 days.

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

Enovix Corp  vs.  Enersys

Enovix Corp

Risk-Adjusted Performance

Very Weak

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

Enersys

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enersys are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enersys is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enovix Corp and Enersys

The main advantage of trading using opposite Enovix Corp and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp 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.

The idea behind Enovix Corp and Enersys 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.