Correlation Between Enfusion and Mitek Systems
Can any of the company-specific risk be diversified away by investing in both Enfusion and Mitek Systems 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 Mitek Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enfusion and Mitek Systems, you can compare the effects of market volatilities on Enfusion and Mitek Systems 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 Mitek Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enfusion and Mitek Systems.
Diversification Opportunities for Enfusion and Mitek Systems
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enfusion and Mitek is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Mitek Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitek Systems 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 Mitek Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitek Systems has no effect on the direction of Enfusion i.e., Enfusion and Mitek Systems go up and down completely randomly.
Pair Corralation between Enfusion and Mitek Systems
Given the investment horizon of 90 days Enfusion is expected to generate 0.69 times more return on investment than Mitek Systems. However, Enfusion is 1.44 times less risky than Mitek Systems. It trades about 0.07 of its potential returns per unit of risk. Mitek Systems is currently generating about -0.01 per unit of risk. If you would invest 793.00 in Enfusion on November 3, 2024 and sell it today you would earn a total of 323.00 from holding Enfusion or generate 40.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enfusion vs. Mitek Systems
Performance |
| Timeline |
| Enfusion |
| Mitek Systems |
Enfusion and Mitek Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enfusion and Mitek Systems
The main advantage of trading using opposite Enfusion and Mitek Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enfusion position performs unexpectedly, Mitek Systems 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 Mitek Systems will offset losses from the drop in Mitek Systems' long position.| Enfusion vs. ON24 Inc | Enfusion vs. Paycor HCM | Enfusion vs. E2open Parent Holdings | Enfusion vs. Braze Inc |
| Mitek Systems vs. Wag Group Co | Mitek Systems vs. OppFi Inc | Mitek Systems vs. Riskified | Mitek Systems vs. Domo 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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