Correlation Between Enerpac Tool and Nuburu

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

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

Diversification Opportunities for Enerpac Tool and Nuburu

-0.53

Correlation Coefficient

Enerpac Tool  Nuburu

Excellent diversification

The 3 months correlation between Enerpac and Nuburu is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Nuburu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuburu Inc and Enerpac Tool 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 Enerpac Tool Group are associated (or correlated) with Nuburu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuburu Inc has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Nuburu go up and down completely randomly.

Pair Corralation between Enerpac Tool and Nuburu

Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.09 times more return on investment than Nuburu. However, Enerpac Tool Group is 10.95 times less risky than Nuburu. It trades about -0.09 of its potential returns per unit of risk. Nuburu Inc is currently generating about -0.05 per unit of risk. If you would invest  4,528  in Enerpac Tool Group on December 5, 2024 and sell it today you would lose (142.00) from holding Enerpac Tool Group or give up 3.14% of portfolio value over 90 days.

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

Enerpac Tool Group  vs.  Nuburu Inc

Enerpac Tool Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enerpac Tool Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Nuburu Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuburu Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Nuburu unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enerpac Tool and Nuburu

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

The idea behind Enerpac Tool Group and Nuburu Inc 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.