Correlation Between Enerpac Tool and ONCOR

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

Diversification Opportunities for Enerpac Tool and ONCOR

-0.5

Correlation Coefficient

Enerpac Tool  ONCOR

Very good diversification

The 3 months correlation between Enerpac and ONCOR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and ONCOR ELEC DELIVERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONCOR ELEC DELIVERY 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 ONCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONCOR ELEC DELIVERY has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and ONCOR go up and down completely randomly.

Pair Corralation between Enerpac Tool and ONCOR

Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 1.97 times more return on investment than ONCOR. However, Enerpac Tool is 1.97 times more volatile than ONCOR ELEC DELIVERY. It trades about 0.12 of its potential returns per unit of risk. ONCOR ELEC DELIVERY is currently generating about 0.06 per unit of risk. If you would invest  3,856  in Enerpac Tool Group on August 30, 2024 and sell it today you would earn a total of  992.00  from holding Enerpac Tool Group or generate 25.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	82.54%
Values	Daily Returns

Enerpac Tool Group  vs.  ONCOR ELEC DELIVERY

Enerpac Tool Group

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enerpac Tool Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Enerpac Tool exhibited solid returns over the last few months and may actually be approaching a breakup point.

ONCOR ELEC DELIVERY

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ONCOR ELEC DELIVERY are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ONCOR is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enerpac Tool and ONCOR

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

The idea behind Enerpac Tool Group and ONCOR ELEC DELIVERY 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.