Correlation Between Curo Group and Encore Capital
Can any of the company-specific risk be diversified away by investing in both Curo Group and Encore Capital 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 Curo Group and Encore Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curo Group Holdings and Encore Capital Group, you can compare the effects of market volatilities on Curo Group and Encore Capital 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 Curo Group with a short position of Encore Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curo Group and Encore Capital.
Diversification Opportunities for Curo Group and Encore Capital
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Curo and Encore is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Curo Group Holdings and Encore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encore Capital Group and Curo Group 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 Curo Group Holdings are associated (or correlated) with Encore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encore Capital Group has no effect on the direction of Curo Group i.e., Curo Group and Encore Capital go up and down completely randomly.
Pair Corralation between Curo Group and Encore Capital
If you would invest 4,565 in Encore Capital Group on August 24, 2024 and sell it today you would earn a total of 239.00 from holding Encore Capital Group or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Curo Group Holdings vs. Encore Capital Group
Performance |
| Timeline |
| Curo Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Encore Capital Group |
Curo Group and Encore Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curo Group and Encore Capital
The main advantage of trading using opposite Curo Group and Encore Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curo Group position performs unexpectedly, Encore Capital 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 Encore Capital will offset losses from the drop in Encore Capital's long position.| Curo Group vs. Enova International | Curo Group vs. Orix Corp Ads | Curo Group vs. Consumer Portfolio Services | Curo Group vs. World Acceptance |
| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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