Correlation Between Ampco Pittsburgh and Enerpac Tool

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Can any of the company-specific risk be diversified away by investing in both Ampco Pittsburgh 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 Ampco Pittsburgh and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampco Pittsburgh and Enerpac Tool Group, you can compare the effects of market volatilities on Ampco Pittsburgh 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 Ampco Pittsburgh with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampco Pittsburgh and Enerpac Tool.

Diversification Opportunities for Ampco Pittsburgh and Enerpac Tool

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Ampco and Enerpac is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ampco-Pittsburgh 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 Ampco Pittsburgh 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 Ampco Pittsburgh 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 Ampco Pittsburgh i.e., Ampco Pittsburgh and Enerpac Tool go up and down completely randomly.

Pair Corralation between Ampco Pittsburgh and Enerpac Tool

Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the Enerpac Tool. In addition to that, Ampco Pittsburgh is 1.93 times more volatile than Enerpac Tool Group. It trades about -0.02 of its total potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.07 per unit of volatility. If you would invest  2,092  in Enerpac Tool Group on December 29, 2023 and sell it today you would earn a total of  1,457  from holding Enerpac Tool Group or generate 69.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ampco-Pittsburgh  vs.  Enerpac Tool Group

 Performance 
       Timeline  
Ampco-Pittsburgh 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Ampco Pittsburgh has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
Enerpac Tool Group 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Enerpac Tool Group are ranked lower than 12 (%) 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.

Ampco Pittsburgh and Enerpac Tool Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ampco Pittsburgh and Enerpac Tool

The main advantage of trading using opposite Ampco Pittsburgh and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampco Pittsburgh 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 Ampco Pittsburgh 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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