Correlation Between Ingersoll Rand and Enerpac Tool
Can any of the company-specific risk be diversified away by investing in both Ingersoll Rand 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 Ingersoll Rand and Enerpac Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingersoll Rand and Enerpac Tool Group, you can compare the effects of market volatilities on Ingersoll Rand 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 Ingersoll Rand with a short position of Enerpac Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingersoll Rand and Enerpac Tool.
Diversification Opportunities for Ingersoll Rand and Enerpac Tool
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ingersoll and Enerpac is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ingersoll Rand 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 Ingersoll Rand 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 Ingersoll Rand 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 Ingersoll Rand i.e., Ingersoll Rand and Enerpac Tool go up and down completely randomly.
Pair Corralation between Ingersoll Rand and Enerpac Tool
Allowing for the 90-day total investment horizon Ingersoll Rand is expected to under-perform the Enerpac Tool. In addition to that, Ingersoll Rand is 1.46 times more volatile than Enerpac Tool Group. It trades about -0.09 of its total potential returns per unit of risk. Enerpac Tool Group is currently generating about 0.13 per unit of volatility. If you would invest 3,539 in Enerpac Tool Group on January 26, 2024 and sell it today you would earn a total of 78.00 from holding Enerpac Tool Group or generate 2.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ingersoll Rand vs. Enerpac Tool Group
Performance |
Timeline |
Ingersoll Rand |
Enerpac Tool Group |
Ingersoll Rand and Enerpac Tool Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ingersoll Rand and Enerpac Tool
The main advantage of trading using opposite Ingersoll Rand and Enerpac Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingersoll Rand 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.Ingersoll Rand vs. Emerson Electric | Ingersoll Rand vs. Smith AO | Ingersoll Rand vs. Eaton PLC | Ingersoll Rand vs. Cummins |
Enerpac Tool vs. Emerson Electric | Enerpac Tool vs. Smith AO | Enerpac Tool vs. Eaton PLC | Enerpac Tool vs. Cummins |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |