Correlation Between Enfusion and Procore Technologies

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

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

Diversification Opportunities for Enfusion and Procore Technologies

0.01

Correlation Coefficient

Enfusion  Procore Technologies

Significant diversification

The 3 months correlation between Enfusion and Procore is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Procore Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procore Technologies and Enfusion 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 Enfusion are associated (or correlated) with Procore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procore Technologies has no effect on the direction of Enfusion i.e., Enfusion and Procore Technologies go up and down completely randomly.

Pair Corralation between Enfusion and Procore Technologies

Given the investment horizon of 90 days Enfusion is expected to generate 0.53 times more return on investment than Procore Technologies. However, Enfusion is 1.9 times less risky than Procore Technologies. It trades about 0.07 of its potential returns per unit of risk. Procore Technologies is currently generating about -0.05 per unit of risk. If you would invest  1,047  in Enfusion on December 30, 2024 and sell it today you would earn a total of  63.00  from holding Enfusion or generate 6.02% return on investment over 90 days.

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

Enfusion  vs.  Procore Technologies

Enfusion

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enfusion are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Enfusion may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Procore Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Procore Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Enfusion and Procore Technologies

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

The idea behind Enfusion and Procore Technologies 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.