Correlation Between Enova International and Cactus Acquisition
Can any of the company-specific risk be diversified away by investing in both Enova International and Cactus Acquisition 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 Enova International and Cactus Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enova International and Cactus Acquisition Corp, you can compare the effects of market volatilities on Enova International and Cactus Acquisition 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 Enova International with a short position of Cactus Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enova International and Cactus Acquisition.
Diversification Opportunities for Enova International and Cactus Acquisition
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enova and Cactus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Enova International and Cactus Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cactus Acquisition Corp and Enova International 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 Enova International are associated (or correlated) with Cactus Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cactus Acquisition Corp has no effect on the direction of Enova International i.e., Enova International and Cactus Acquisition go up and down completely randomly.
Pair Corralation between Enova International and Cactus Acquisition
Given the investment horizon of 90 days Enova International is expected to generate 0.6 times more return on investment than Cactus Acquisition. However, Enova International is 1.68 times less risky than Cactus Acquisition. It trades about 0.34 of its potential returns per unit of risk. Cactus Acquisition Corp is currently generating about 0.0 per unit of risk. If you would invest 8,697 in Enova International on August 29, 2024 and sell it today you would earn a total of 1,857 from holding Enova International or generate 21.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enova International vs. Cactus Acquisition Corp
Performance |
| Timeline |
| Enova International |
| Cactus Acquisition Corp |
Enova International and Cactus Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enova International and Cactus Acquisition
The main advantage of trading using opposite Enova International and Cactus Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enova International position performs unexpectedly, Cactus Acquisition 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 Cactus Acquisition will offset losses from the drop in Cactus Acquisition's long position.| Enova International vs. Regional Management Corp | Enova International vs. Encore Capital Group | Enova International vs. Customers Bancorp | Enova International vs. Employers 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |