Correlation Between Enova International and EZCORP
Can any of the company-specific risk be diversified away by investing in both Enova International and EZCORP 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 EZCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enova International and EZCORP Inc, you can compare the effects of market volatilities on Enova International and EZCORP 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 EZCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enova International and EZCORP.
Diversification Opportunities for Enova International and EZCORP
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enova and EZCORP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Enova International and EZCORP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZCORP Inc 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 EZCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZCORP Inc has no effect on the direction of Enova International i.e., Enova International and EZCORP go up and down completely randomly.
Pair Corralation between Enova International and EZCORP
Given the investment horizon of 90 days Enova International is expected to generate 1.57 times more return on investment than EZCORP. However, Enova International is 1.57 times more volatile than EZCORP Inc. It trades about 0.33 of its potential returns per unit of risk. EZCORP Inc is currently generating about 0.19 per unit of risk. If you would invest 9,499 in Enova International on October 20, 2024 and sell it today you would earn a total of 1,263 from holding Enova International or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enova International vs. EZCORP Inc
Performance |
| Timeline |
| Enova International |
| EZCORP Inc |
Enova International and EZCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enova International and EZCORP
The main advantage of trading using opposite Enova International and EZCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enova International position performs unexpectedly, EZCORP 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 EZCORP will offset losses from the drop in EZCORP'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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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