Correlation Between Global Business and Enfusion
Can any of the company-specific risk be diversified away by investing in both Global Business and Enfusion 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 Global Business and Enfusion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Business Travel and Enfusion, you can compare the effects of market volatilities on Global Business and Enfusion 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 Global Business with a short position of Enfusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Business and Enfusion.
Diversification Opportunities for Global Business and Enfusion
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Enfusion is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Global Business Travel and Enfusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enfusion and Global Business 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 Global Business Travel are associated (or correlated) with Enfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enfusion has no effect on the direction of Global Business i.e., Global Business and Enfusion go up and down completely randomly.
Pair Corralation between Global Business and Enfusion
Given the investment horizon of 90 days Global Business Travel is expected to generate 1.07 times more return on investment than Enfusion. However, Global Business is 1.07 times more volatile than Enfusion. It trades about 0.05 of its potential returns per unit of risk. Enfusion is currently generating about 0.02 per unit of risk. If you would invest 555.00 in Global Business Travel on August 24, 2024 and sell it today you would earn a total of 389.00 from holding Global Business Travel or generate 70.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Business Travel vs. Enfusion
Performance |
| Timeline |
| Global Business Travel |
| Enfusion |
Global Business and Enfusion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Business and Enfusion
The main advantage of trading using opposite Global Business and Enfusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Business position performs unexpectedly, Enfusion 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 Enfusion will offset losses from the drop in Enfusion's long position.| Global Business vs. Envestnet | Global Business vs. Meridianlink | Global Business vs. Alkami Technology | Global Business vs. Blackbaud |
| Enfusion vs. ON24 Inc | Enfusion vs. Paycor HCM | Enfusion vs. E2open Parent Holdings | Enfusion vs. Braze 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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