Correlation Between Enfusion and Pegasystems
Can any of the company-specific risk be diversified away by investing in both Enfusion and Pegasystems 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 Pegasystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enfusion and Pegasystems, you can compare the effects of market volatilities on Enfusion and Pegasystems 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 Pegasystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enfusion and Pegasystems.
Diversification Opportunities for Enfusion and Pegasystems
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enfusion and Pegasystems is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Pegasystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasystems 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 Pegasystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasystems has no effect on the direction of Enfusion i.e., Enfusion and Pegasystems go up and down completely randomly.
Pair Corralation between Enfusion and Pegasystems
Given the investment horizon of 90 days Enfusion is expected to generate 2.5 times less return on investment than Pegasystems. But when comparing it to its historical volatility, Enfusion is 1.64 times less risky than Pegasystems. It trades about 0.07 of its potential returns per unit of risk. Pegasystems is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,962 in Pegasystems on August 29, 2024 and sell it today you would earn a total of 4,683 from holding Pegasystems or generate 94.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enfusion vs. Pegasystems
Performance |
| Timeline |
| Enfusion |
| Pegasystems |
Enfusion and Pegasystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enfusion and Pegasystems
The main advantage of trading using opposite Enfusion and Pegasystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enfusion position performs unexpectedly, Pegasystems 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 Pegasystems will offset losses from the drop in Pegasystems' long position.| Enfusion vs. ON24 Inc | Enfusion vs. Paycor HCM | Enfusion vs. E2open Parent Holdings | Enfusion vs. Braze Inc |
| Pegasystems vs. Wex Inc | Pegasystems vs. Cognex | Pegasystems vs. Progress Software | Pegasystems vs. Fair Isaac |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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