Correlation Between Acadian Asset and Enpro Industries

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

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

Diversification Opportunities for Acadian Asset and Enpro Industries

0.89

Correlation Coefficient

Acadian Asset  Enpro Industries

Very poor diversification

The 3 months correlation between Acadian and Enpro is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Acadian Asset Management and Enpro Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enpro Industries and Acadian Asset 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 Acadian Asset Management 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 Acadian Asset i.e., Acadian Asset and Enpro Industries go up and down completely randomly.

Pair Corralation between Acadian Asset and Enpro Industries

Given the investment horizon of 90 days Acadian Asset Management is expected to generate 0.99 times more return on investment than Enpro Industries. However, Acadian Asset Management is 1.01 times less risky than Enpro Industries. It trades about 0.34 of its potential returns per unit of risk. Enpro Industries is currently generating about 0.22 per unit of risk. If you would invest  2,886  in Acadian Asset Management on May 7, 2025 and sell it today you would earn a total of  1,176  from holding Acadian Asset Management or generate 40.75% return on investment over 90 days.

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

Acadian Asset Management  vs.  Enpro Industries

Acadian Asset Management

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Acadian Asset Management are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Acadian Asset demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Enpro Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enpro Industries are ranked lower than 17 (%) 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 Acadian Asset and Enpro Industries

The main advantage of trading using opposite Acadian Asset and Enpro Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadian Asset 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 Acadian Asset Management 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.