Correlation Between Hillenbrand and Enerpac Tool

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

By analyzing existing cross correlation between Hillenbrand and Enerpac Tool Group, you can compare the effects of market volatilities on Hillenbrand and Enerpac Tool 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 Hillenbrand with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and Enerpac Tool.

Diversification Opportunities for Hillenbrand and Enerpac Tool

0.44

Correlation Coefficient

Hillenbrand  Enerpac Tool

Very weak diversification

The 3 months correlation between Hillenbrand and Enerpac is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and Enerpac Tool Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerpac Tool Group and Hillenbrand 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 Hillenbrand are associated (or correlated) with Enerpac Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerpac Tool Group has no effect on the direction of Hillenbrand i.e., Hillenbrand and Enerpac Tool go up and down completely randomly.

Pair Corralation between Hillenbrand and Enerpac Tool

Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 1.39 times more return on investment than Enerpac Tool. However, Hillenbrand is 1.39 times more volatile than Enerpac Tool Group. It trades about 0.14 of its potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.01 per unit of risk. If you would invest  2,770  in Hillenbrand on October 20, 2024 and sell it today you would earn a total of  625.00  from holding Hillenbrand or generate 22.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Hillenbrand  vs.  Enerpac Tool Group

Hillenbrand

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hillenbrand are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Hillenbrand demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Enerpac Tool Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enerpac Tool Group has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Hillenbrand and Enerpac Tool

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

The idea behind Hillenbrand and Enerpac Tool Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.