Correlation Between Graftech International and EnerSys

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Can any of the company-specific risk be diversified away by investing in both Graftech International and EnerSys 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 EnerSys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graftech International and EnerSys, you can compare the effects of market volatilities on Graftech International and EnerSys 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 EnerSys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graftech International and EnerSys.

Diversification Opportunities for Graftech International and EnerSys

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Graftech and EnerSys is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Graftech International and EnerSys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnerSys 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 EnerSys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnerSys has no effect on the direction of Graftech International i.e., Graftech International and EnerSys go up and down completely randomly.

Pair Corralation between Graftech International and EnerSys

Considering the 90-day investment horizon Graftech International is expected to under-perform the EnerSys. But the stock apears to be less risky and, when comparing its historical volatility, Graftech International is 1.01 times less risky than EnerSys. The stock trades about -0.12 of its potential returns per unit of risk. The EnerSys is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  6,624  in EnerSys on March 28, 2022 and sell it today you would lose (532.00)  from holding EnerSys or give up 8.03% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Graftech International  vs.  EnerSys

 Performance (%) 
      Timeline 
Graftech International 
Graftech Performance
0 of 100
Over the last 90 days Graftech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0052
Payout Ratio
0.0215
Last Split Factor
100:1
Forward Annual Dividend Rate
0.04
Dividend Date
2022-06-30
Ex Dividend Date
2022-05-27
Last Split Date
2010-06-30

Graftech Price Channel

EnerSys 
EnerSys Performance
0 of 100
Over the last 90 days EnerSys has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in July 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0115
Payout Ratio
0.16
Last Split Factor
10:1
Forward Annual Dividend Rate
0.7
Dividend Date
2022-06-30
Ex Dividend Date
2022-06-15
Last Split Date
2011-10-20

EnerSys Price Channel

Graftech International and EnerSys Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Graftech International and EnerSys

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

Graftech International

Pair trading matchups for Graftech International

The idea behind Graftech International and EnerSys 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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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