Correlation Between GSE Systems and Enfusion
Can any of the company-specific risk be diversified away by investing in both GSE Systems 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 GSE Systems and Enfusion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSE Systems and Enfusion, you can compare the effects of market volatilities on GSE Systems 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 GSE Systems with a short position of Enfusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSE Systems and Enfusion.
Diversification Opportunities for GSE Systems and Enfusion
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GSE and Enfusion is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GSE Systems and Enfusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enfusion and GSE Systems 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 GSE Systems 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 GSE Systems i.e., GSE Systems and Enfusion go up and down completely randomly.
Pair Corralation between GSE Systems and Enfusion
Considering the 90-day investment horizon GSE Systems is expected to generate 2.99 times more return on investment than Enfusion. However, GSE Systems is 2.99 times more volatile than Enfusion. It trades about 0.04 of its potential returns per unit of risk. Enfusion is currently generating about 0.04 per unit of risk. If you would invest 416.00 in GSE Systems on September 1, 2024 and sell it today you would earn a total of 43.00 from holding GSE Systems or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.92% |
| Values | Daily Returns |
GSE Systems vs. Enfusion
Performance |
| Timeline |
| GSE Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Enfusion |
GSE Systems and Enfusion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSE Systems and Enfusion
The main advantage of trading using opposite GSE Systems and Enfusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSE Systems 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.| GSE Systems vs. LifeSpeak | GSE Systems vs. RenoWorks Software | GSE Systems vs. 01 Communique Laboratory | GSE Systems vs. RESAAS Services |
| Enfusion vs. Ke Holdings | Enfusion vs. nCino Inc | Enfusion vs. Kingsoft Cloud Holdings | Enfusion vs. Jfrog |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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