Correlation Between Enpro Industries and Xebec Adsorption

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

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

Diversification Opportunities for Enpro Industries and Xebec Adsorption

0.0

Correlation Coefficient

Enpro Industries  Xebec Adsorption

Pay attention - limited upside

The 3 months correlation between Enpro and Xebec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enpro Industries and Xebec Adsorption in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xebec Adsorption and Enpro Industries 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 Enpro Industries are associated (or correlated) with Xebec Adsorption. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xebec Adsorption has no effect on the direction of Enpro Industries i.e., Enpro Industries and Xebec Adsorption go up and down completely randomly.

Pair Corralation between Enpro Industries and Xebec Adsorption

If you would invest  15,095  in Enpro Industries on August 31, 2024 and sell it today you would earn a total of  3,707  from holding Enpro Industries or generate 24.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Enpro Industries  vs.  Xebec Adsorption

Enpro Industries

Risk-Adjusted Performance

13 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enpro Industries are ranked lower than 13 (%) 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.

Xebec Adsorption

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xebec Adsorption has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Xebec Adsorption is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Enpro Industries and Xebec Adsorption

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

The idea behind Enpro Industries and Xebec Adsorption 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..