Correlation Between Enerpac Tool and IDEX

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

Diversification Opportunities for Enerpac Tool and IDEX

-0.27

Correlation Coefficient

Enerpac Tool  IDEX

Very good diversification

The 3 months correlation between Enerpac and IDEX is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and IDEX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX 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 IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and IDEX go up and down completely randomly.

Pair Corralation between Enerpac Tool and IDEX

Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 1.15 times more return on investment than IDEX. However, Enerpac Tool is 1.15 times more volatile than IDEX Corporation. It trades about 0.09 of its potential returns per unit of risk. IDEX Corporation is currently generating about -0.11 per unit of risk. If you would invest  4,139  in Enerpac Tool Group on December 28, 2024 and sell it today you would earn a total of  412.00  from holding Enerpac Tool Group or generate 9.95% 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.  IDEX Corp.

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 7 (%) 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.

IDEX

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDEX Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Enerpac Tool and IDEX

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

The idea behind Enerpac Tool Group and IDEX Corporation 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 CEOs Directory module to screen CEOs from public companies around the world.