Correlation Between Atlanticus Holdings and Enova International

Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings and Enova International 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 Atlanticus Holdings and Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlanticus Holdings and Enova International, you can compare the effects of market volatilities on Atlanticus Holdings and Enova International 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 Atlanticus Holdings with a short position of Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanticus Holdings and Enova International.

Diversification Opportunities for Atlanticus Holdings and Enova International

0.8

Correlation Coefficient

Atlanticus Holdings  Enova International

Very poor diversification

The 3 months correlation between Atlanticus and Enova is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International and Atlanticus Holdings 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 Atlanticus Holdings are associated (or correlated) with Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Enova International go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and Enova International

Given the investment horizon of 90 days Atlanticus Holdings is expected to under-perform the Enova International. In addition to that, Atlanticus Holdings is 1.54 times more volatile than Enova International. It trades about -0.03 of its total potential returns per unit of risk. Enova International is currently generating about 0.0 per unit of volatility. If you would invest  9,694  in Enova International on December 30, 2024 and sell it today you would lose (83.00) from holding Enova International or give up 0.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Atlanticus Holdings  vs.  Enova International

Atlanticus Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlanticus Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Enova International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enova International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Enova International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atlanticus Holdings and Enova International

The main advantage of trading using opposite Atlanticus Holdings and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanticus Holdings position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.

The idea behind Atlanticus Holdings and Enova International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.