Correlation Between Associated Capital and Enova International
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Enova International 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 Associated Capital and Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Enova International, you can compare the effects of market volatilities on Associated Capital and Enova International 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 Associated Capital with a short position of Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Enova International.
Diversification Opportunities for Associated Capital and Enova International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and Enova is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International and Associated Capital 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 Associated Capital Group are associated (or correlated) with Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Associated Capital i.e., Associated Capital and Enova International go up and down completely randomly.
Pair Corralation between Associated Capital and Enova International
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 4.51 times less return on investment than Enova International. But when comparing it to its historical volatility, Associated Capital Group is 2.69 times less risky than Enova International. It trades about 0.15 of its potential returns per unit of risk. Enova International is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8,817 in Enova International on August 24, 2024 and sell it today you would earn a total of 1,385 from holding Enova International or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Enova International
Performance |
| Timeline |
| Associated Capital |
| Enova International |
Associated Capital and Enova International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Enova International
The main advantage of trading using opposite Associated Capital and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.| Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Munivest | Associated Capital vs. SEI Investments | Associated Capital vs. SCOR PK |
| Enova International vs. Regional Management Corp | Enova International vs. Encore Capital Group | Enova International vs. Customers Bancorp | Enova International vs. Employers Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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