Correlation Between Enerpac Tool and Graham

Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Graham 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 Graham 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 Graham, you can compare the effects of market volatilities on Enerpac Tool and Graham 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 Graham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Graham.

Diversification Opportunities for Enerpac Tool and Graham

-0.32

Correlation Coefficient

Enerpac Tool  Graham

Very good diversification

The 3 months correlation between Enerpac and Graham is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham 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 Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Graham go up and down completely randomly.

Pair Corralation between Enerpac Tool and Graham

Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.52 times more return on investment than Graham. However, Enerpac Tool Group is 1.91 times less risky than Graham. It trades about 0.07 of its potential returns per unit of risk. Graham is currently generating about -0.15 per unit of risk. If you would invest  4,139  in Enerpac Tool Group on December 29, 2024 and sell it today you would earn a total of  341.00  from holding Enerpac Tool Group or generate 8.24% return on investment over 90 days.

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

Enerpac Tool Group  vs.  Graham

Enerpac Tool Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enerpac Tool Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Enerpac Tool may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Graham

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graham has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Enerpac Tool and Graham

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

The idea behind Enerpac Tool Group and Graham 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.