Correlation Between Enersense International and Rush Factory

Can any of the company-specific risk be diversified away by investing in both Enersense International and Rush Factory 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 Enersense International and Rush Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enersense International Oyj and Rush Factory Oyj, you can compare the effects of market volatilities on Enersense International and Rush Factory 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 Enersense International with a short position of Rush Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersense International and Rush Factory.

Diversification Opportunities for Enersense International and Rush Factory

-0.71

Correlation Coefficient

Enersense International  Rush Factory

Pay attention - limited upside

The 3 months correlation between Enersense and Rush is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Enersense International Oyj and Rush Factory Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rush Factory Oyj and Enersense International 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 Enersense International Oyj are associated (or correlated) with Rush Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rush Factory Oyj has no effect on the direction of Enersense International i.e., Enersense International and Rush Factory go up and down completely randomly.

Pair Corralation between Enersense International and Rush Factory

Assuming the 90 days trading horizon Enersense International Oyj is expected to under-perform the Rush Factory. But the stock apears to be less risky and, when comparing its historical volatility, Enersense International Oyj is 3.7 times less risky than Rush Factory. The stock trades about -0.09 of its potential returns per unit of risk. The Rush Factory Oyj is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Rush Factory Oyj on September 2, 2024 and sell it today you would earn a total of  32.00  from holding Rush Factory Oyj or generate 94.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

Enersense International Oyj  vs.  Rush Factory Oyj

Enersense International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enersense International Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rush Factory Oyj

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Enersense International and Rush Factory

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

The idea behind Enersense International Oyj and Rush Factory Oyj 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.