Correlation Between Enfusion and Aspen Technology
Can any of the company-specific risk be diversified away by investing in both Enfusion and Aspen Technology 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 Enfusion and Aspen Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enfusion and Aspen Technology, you can compare the effects of market volatilities on Enfusion and Aspen Technology 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 Enfusion with a short position of Aspen Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enfusion and Aspen Technology.
Diversification Opportunities for Enfusion and Aspen Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enfusion and Aspen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Aspen Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Technology and Enfusion 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 Enfusion are associated (or correlated) with Aspen Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Technology has no effect on the direction of Enfusion i.e., Enfusion and Aspen Technology go up and down completely randomly.
Pair Corralation between Enfusion and Aspen Technology
Given the investment horizon of 90 days Enfusion is expected to generate 2.07 times more return on investment than Aspen Technology. However, Enfusion is 2.07 times more volatile than Aspen Technology. It trades about 0.23 of its potential returns per unit of risk. Aspen Technology is currently generating about 0.22 per unit of risk. If you would invest 916.00 in Enfusion on August 28, 2024 and sell it today you would earn a total of 90.00 from holding Enfusion or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enfusion vs. Aspen Technology
Performance |
| Timeline |
| Enfusion |
| Aspen Technology |
Enfusion and Aspen Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enfusion and Aspen Technology
The main advantage of trading using opposite Enfusion and Aspen Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enfusion position performs unexpectedly, Aspen Technology 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 Aspen Technology will offset losses from the drop in Aspen Technology's long position.| Enfusion vs. ON24 Inc | Enfusion vs. Paycor HCM | Enfusion vs. E2open Parent Holdings | Enfusion vs. Braze Inc |
| Aspen Technology vs. Bentley Systems | Aspen Technology vs. Tyler Technologies | Aspen Technology vs. Blackbaud | Aspen Technology vs. SSC Technologies 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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