Correlation Between Enova International and FirstCash
Can any of the company-specific risk be diversified away by investing in both Enova International and FirstCash 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 FirstCash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enova International and FirstCash, you can compare the effects of market volatilities on Enova International and FirstCash 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 FirstCash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enova International and FirstCash.
Diversification Opportunities for Enova International and FirstCash
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enova and FirstCash is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Enova International and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash 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 FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of Enova International i.e., Enova International and FirstCash go up and down completely randomly.
Pair Corralation between Enova International and FirstCash
Given the investment horizon of 90 days Enova International is expected to generate 1.28 times more return on investment than FirstCash. However, Enova International is 1.28 times more volatile than FirstCash. It trades about 0.19 of its potential returns per unit of risk. FirstCash is currently generating about -0.01 per unit of risk. If you would invest 4,120 in Enova International on August 26, 2024 and sell it today you would earn a total of 6,354 from holding Enova International or generate 154.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enova International vs. FirstCash
Performance |
| Timeline |
| Enova International |
| FirstCash |
Enova International and FirstCash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enova International and FirstCash
The main advantage of trading using opposite Enova International and FirstCash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enova International position performs unexpectedly, FirstCash 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 FirstCash will offset losses from the drop in FirstCash's long position.| Enova International vs. SLM Corp | Enova International vs. Orix Corp Ads | Enova International vs. FirstCash | Enova International vs. Medallion Financial Corp |
| FirstCash vs. World Acceptance | FirstCash vs. Enova International | FirstCash vs. Green Dot | FirstCash vs. Medallion Financial Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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