Correlation Between Enfusion and ReposiTrak

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

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

Diversification Opportunities for Enfusion and ReposiTrak

-0.54

Correlation Coefficient

Enfusion  ReposiTrak

Excellent diversification

The 3 months correlation between Enfusion and ReposiTrak is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and ReposiTrak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReposiTrak 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 ReposiTrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReposiTrak has no effect on the direction of Enfusion i.e., Enfusion and ReposiTrak go up and down completely randomly.

Pair Corralation between Enfusion and ReposiTrak

Given the investment horizon of 90 days Enfusion is expected to generate 0.85 times more return on investment than ReposiTrak. However, Enfusion is 1.18 times less risky than ReposiTrak. It trades about 0.06 of its potential returns per unit of risk. ReposiTrak is currently generating about -0.05 per unit of risk. If you would invest  1,052  in Enfusion on December 23, 2024 and sell it today you would earn a total of  58.00  from holding Enfusion or generate 5.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Enfusion  vs.  ReposiTrak

Enfusion

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enfusion are ranked lower than 4 (%) 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.

ReposiTrak

Risk-Adjusted Performance

Very Weak

Over the last 90 days ReposiTrak has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Enfusion and ReposiTrak

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

The idea behind Enfusion and ReposiTrak 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.