Correlation Between Intevac and Enpro Industries

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

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

Diversification Opportunities for Intevac and Enpro Industries

-0.67

Correlation Coefficient

Intevac  Enpro Industries

Excellent diversification

The 3 months correlation between Intevac and Enpro is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Enpro Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enpro Industries and Intevac 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 Intevac are associated (or correlated) with Enpro Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enpro Industries has no effect on the direction of Intevac i.e., Intevac and Enpro Industries go up and down completely randomly.

Pair Corralation between Intevac and Enpro Industries

Given the investment horizon of 90 days Intevac is expected to under-perform the Enpro Industries. In addition to that, Intevac is 2.0 times more volatile than Enpro Industries. It trades about -0.11 of its total potential returns per unit of risk. Enpro Industries is currently generating about 0.45 per unit of volatility. If you would invest  14,732  in Enpro Industries on September 2, 2024 and sell it today you would earn a total of  4,178  from holding Enpro Industries or generate 28.36% return on investment over 90 days.

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

Intevac  vs.  Enpro Industries

Intevac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intevac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Enpro Industries

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enpro Industries are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Enpro Industries displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intevac and Enpro Industries

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

The idea behind Intevac and Enpro Industries 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.