Correlation Between Enovis Corp and CSW Industrials
Can any of the company-specific risk be diversified away by investing in both Enovis Corp and CSW Industrials 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 Enovis Corp and CSW Industrials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovis Corp and CSW Industrials, you can compare the effects of market volatilities on Enovis Corp and CSW Industrials 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 Enovis Corp with a short position of CSW Industrials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovis Corp and CSW Industrials.
Diversification Opportunities for Enovis Corp and CSW Industrials
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enovis and CSW is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Enovis Corp and CSW Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSW Industrials and Enovis Corp 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 Enovis Corp are associated (or correlated) with CSW Industrials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSW Industrials has no effect on the direction of Enovis Corp i.e., Enovis Corp and CSW Industrials go up and down completely randomly.
Pair Corralation between Enovis Corp and CSW Industrials
Given the investment horizon of 90 days Enovis Corp is expected to under-perform the CSW Industrials. In addition to that, Enovis Corp is 1.05 times more volatile than CSW Industrials. It trades about -0.2 of its total potential returns per unit of risk. CSW Industrials is currently generating about 0.06 per unit of volatility. If you would invest 24,804 in CSW Industrials on March 7, 2024 and sell it today you would earn a total of 434.00 from holding CSW Industrials or generate 1.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Enovis Corp vs. CSW Industrials
Performance |
Timeline |
Enovis Corp |
CSW Industrials |
Enovis Corp and CSW Industrials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enovis Corp and CSW Industrials
The main advantage of trading using opposite Enovis Corp and CSW Industrials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovis Corp position performs unexpectedly, CSW Industrials 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 CSW Industrials will offset losses from the drop in CSW Industrials' long position.Enovis Corp vs. Helios Technologies | Enovis Corp vs. Enpro Industries | Enovis Corp vs. Omega Flex | Enovis Corp vs. Luxfer Holdings PLC |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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