Correlation Between Enfusion and Fair Isaac
Can any of the company-specific risk be diversified away by investing in both Enfusion and Fair Isaac 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 Fair Isaac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enfusion and Fair Isaac, you can compare the effects of market volatilities on Enfusion and Fair Isaac 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 Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enfusion and Fair Isaac.
Diversification Opportunities for Enfusion and Fair Isaac
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enfusion and Fair is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of Enfusion i.e., Enfusion and Fair Isaac go up and down completely randomly.
Pair Corralation between Enfusion and Fair Isaac
Given the investment horizon of 90 days Enfusion is expected to generate 1.57 times less return on investment than Fair Isaac. In addition to that, Enfusion is 1.2 times more volatile than Fair Isaac. It trades about 0.16 of its total potential returns per unit of risk. Fair Isaac is currently generating about 0.29 per unit of volatility. If you would invest 173,027 in Fair Isaac on August 30, 2024 and sell it today you would earn a total of 62,373 from holding Fair Isaac or generate 36.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enfusion vs. Fair Isaac
Performance |
| Timeline |
| Enfusion |
| Fair Isaac |
Enfusion and Fair Isaac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enfusion and Fair Isaac
The main advantage of trading using opposite Enfusion and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enfusion position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.| Enfusion vs. ON24 Inc | Enfusion vs. Paycor HCM | Enfusion vs. E2open Parent Holdings | Enfusion vs. Braze Inc |
| Fair Isaac vs. Roper Technologies, Common | Fair Isaac vs. Cadence Design Systems | Fair Isaac vs. Guidewire Software | Fair Isaac vs. Bentley Systems |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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