Correlation Between Enfusion and Freshworks
Can any of the company-specific risk be diversified away by investing in both Enfusion and Freshworks 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 Freshworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enfusion and Freshworks, you can compare the effects of market volatilities on Enfusion and Freshworks 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 Freshworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enfusion and Freshworks.
Diversification Opportunities for Enfusion and Freshworks
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enfusion and Freshworks is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Freshworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshworks 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 Freshworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshworks has no effect on the direction of Enfusion i.e., Enfusion and Freshworks go up and down completely randomly.
Pair Corralation between Enfusion and Freshworks
Given the investment horizon of 90 days Enfusion is expected to generate 3.91 times less return on investment than Freshworks. But when comparing it to its historical volatility, Enfusion is 3.25 times less risky than Freshworks. It trades about 0.23 of its potential returns per unit of risk. Freshworks is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,169 in Freshworks on August 27, 2024 and sell it today you would earn a total of 476.00 from holding Freshworks or generate 40.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enfusion vs. Freshworks
Performance |
| Timeline |
| Enfusion |
| Freshworks |
Enfusion and Freshworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enfusion and Freshworks
The main advantage of trading using opposite Enfusion and Freshworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enfusion position performs unexpectedly, Freshworks 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 Freshworks will offset losses from the drop in Freshworks' long position.| Enfusion vs. ON24 Inc | Enfusion vs. Paycor HCM | Enfusion vs. E2open Parent Holdings | Enfusion vs. Braze Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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