Correlation Between Encore Capital and Adobe
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By analyzing existing cross correlation between Encore Capital Group and Adobe 23 percent, you can compare the effects of market volatilities on Encore Capital and Adobe 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 Encore Capital with a short position of Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and Adobe.
Diversification Opportunities for Encore Capital and Adobe
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Encore and Adobe is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and Adobe 23 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe 23 percent and Encore 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 Encore Capital Group are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe 23 percent has no effect on the direction of Encore Capital i.e., Encore Capital and Adobe go up and down completely randomly.
Pair Corralation between Encore Capital and Adobe
Given the investment horizon of 90 days Encore Capital Group is expected to generate 4.45 times more return on investment than Adobe. However, Encore Capital is 4.45 times more volatile than Adobe 23 percent. It trades about 0.01 of its potential returns per unit of risk. Adobe 23 percent is currently generating about 0.01 per unit of risk. If you would invest 4,717 in Encore Capital Group on September 13, 2024 and sell it today you would earn a total of 211.00 from holding Encore Capital Group or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Encore Capital Group vs. Adobe 23 percent
Performance |
| Timeline |
| Encore Capital Group |
| Adobe 23 percent |
Encore Capital and Adobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and Adobe
The main advantage of trading using opposite Encore Capital and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe's long position.| Encore Capital vs. Visa Class A | Encore Capital vs. PayPal Holdings | Encore Capital vs. Upstart Holdings | Encore Capital vs. Mastercard |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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