Correlation Between Enerpac Tool and Nano Nuclear

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

Diversification Opportunities for Enerpac Tool and Nano Nuclear

0.27

Correlation Coefficient

Enerpac Tool  Nano Nuclear

Modest diversification

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

Pair Corralation between Enerpac Tool and Nano Nuclear

Given the investment horizon of 90 days Enerpac Tool is expected to generate 10.43 times less return on investment than Nano Nuclear. But when comparing it to its historical volatility, Enerpac Tool Group is 5.49 times less risky than Nano Nuclear. It trades about 0.04 of its potential returns per unit of risk. Nano Nuclear Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,847  in Nano Nuclear Energy on December 25, 2024 and sell it today you would earn a total of  446.00  from holding Nano Nuclear Energy or generate 15.67% return on investment over 90 days.

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

Enerpac Tool Group  vs.  Nano Nuclear Energy

Enerpac Tool Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enerpac Tool Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Enerpac Tool is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Nano Nuclear Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Nuclear Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Nano Nuclear exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enerpac Tool and Nano Nuclear

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

The idea behind Enerpac Tool Group and Nano Nuclear Energy 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.