Correlation Between Enerpac Tool and Babcock Wilcox
Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Babcock Wilcox 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 Babcock Wilcox 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 Babcock Wilcox Enterprises, you can compare the effects of market volatilities on Enerpac Tool and Babcock Wilcox 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 Babcock Wilcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Babcock Wilcox.
Diversification Opportunities for Enerpac Tool and Babcock Wilcox
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enerpac and Babcock is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Babcock Wilcox Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter 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 Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Babcock Wilcox go up and down completely randomly.
Pair Corralation between Enerpac Tool and Babcock Wilcox
Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.14 times more return on investment than Babcock Wilcox. However, Enerpac Tool Group is 6.99 times less risky than Babcock Wilcox. It trades about 0.13 of its potential returns per unit of risk. Babcock Wilcox Enterprises is currently generating about -0.03 per unit of risk. If you would invest 2,828 in Enerpac Tool Group on January 19, 2024 and sell it today you would earn a total of 647.00 from holding Enerpac Tool Group or generate 22.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Enerpac Tool Group vs. Babcock Wilcox Enterprises
Performance |
| Timeline |
| Enerpac Tool Group |
| Babcock Wilcox Enter |
Enerpac Tool and Babcock Wilcox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerpac Tool and Babcock Wilcox
The main advantage of trading using opposite Enerpac Tool and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerpac Tool position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.| Enerpac Tool vs. Parker Hannifin | Enerpac Tool vs. Emerson Electric | Enerpac Tool vs. Smith AO | Enerpac Tool vs. Franklin Electric Co |
| Babcock Wilcox vs. Illinois Tool Works | Babcock Wilcox vs. Pentair PLC | Babcock Wilcox vs. Emerson Electric | Babcock Wilcox vs. Smith AO |
Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |