Correlation Between GrafTech International and Energizer Holdings

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

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

Diversification Opportunities for GrafTech International and Energizer Holdings

-0.44

Correlation Coefficient

GrafTech International  Energizer Holdings

Very good diversification

The 3 months correlation between GrafTech and Energizer is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GrafTech International and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings and GrafTech International 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 GrafTech International are associated (or correlated) with Energizer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energizer Holdings has no effect on the direction of GrafTech International i.e., GrafTech International and Energizer Holdings go up and down completely randomly.

Pair Corralation between GrafTech International and Energizer Holdings

Considering the 90-day investment horizon GrafTech International is expected to generate 3.01 times more return on investment than Energizer Holdings. However, GrafTech International is 3.01 times more volatile than Energizer Holdings. It trades about 0.23 of its potential returns per unit of risk. Energizer Holdings is currently generating about -0.06 per unit of risk. If you would invest  59.00  in GrafTech International on May 1, 2025 and sell it today you would earn a total of  93.00  from holding GrafTech International or generate 157.63% return on investment over 90 days.

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

GrafTech International  vs.  Energizer Holdings

GrafTech International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GrafTech International are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, GrafTech International reported solid returns over the last few months and may actually be approaching a breakup point.

Energizer Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energizer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with GrafTech International and Energizer Holdings

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

The idea behind GrafTech International and Energizer Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.