Correlation Between Enerpac Tool and Nidec

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

Diversification Opportunities for Enerpac Tool and Nidec

-0.33

Correlation Coefficient

Enerpac Tool  Nidec

Very good diversification

The 3 months correlation between Enerpac and Nidec is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Nidec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidec 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 Nidec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidec has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Nidec go up and down completely randomly.

Pair Corralation between Enerpac Tool and Nidec

If you would invest  4,412  in Enerpac Tool Group on September 1, 2024 and sell it today you would earn a total of  414.00  from holding Enerpac Tool Group or generate 9.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Enerpac Tool Group  vs.  Nidec

Enerpac Tool Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enerpac Tool Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Enerpac Tool exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nidec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nidec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Nidec is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enerpac Tool and Nidec

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

The idea behind Enerpac Tool Group and Nidec 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.