Correlation Between Enerpac Tool and Curtiss Wright

Can any of the company-specific risk be diversified away by investing in both Enerpac Tool and Curtiss Wright 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 Curtiss Wright 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 Curtiss Wright, you can compare the effects of market volatilities on Enerpac Tool and Curtiss Wright 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 Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerpac Tool and Curtiss Wright.

Diversification Opportunities for Enerpac Tool and Curtiss Wright

0.94

Correlation Coefficient

Enerpac Tool  Curtiss Wright

Almost no diversification

The 3 months correlation between Enerpac and Curtiss is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Enerpac Tool Group and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright 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 Curtiss Wright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Wright has no effect on the direction of Enerpac Tool i.e., Enerpac Tool and Curtiss Wright go up and down completely randomly.

Pair Corralation between Enerpac Tool and Curtiss Wright

Given the investment horizon of 90 days Enerpac Tool Group is expected to generate 0.97 times more return on investment than Curtiss Wright. However, Enerpac Tool Group is 1.03 times less risky than Curtiss Wright. It trades about 0.15 of its potential returns per unit of risk. Curtiss Wright is currently generating about 0.08 per unit of risk. If you would invest  3,525  in Enerpac Tool Group on January 25, 2024 and sell it today you would earn a total of  92.00  from holding Enerpac Tool Group or generate 2.61% return on investment over 90 days.

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

Enerpac Tool Group  vs.  Curtiss Wright

Enerpac Tool Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enerpac Tool Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Enerpac Tool exhibited solid returns over the last few months and may actually be approaching a breakup point.

Curtiss Wright

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Curtiss Wright may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Enerpac Tool and Curtiss Wright

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

The idea behind Enerpac Tool Group and Curtiss Wright 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.