Correlation Between Enfusion and Workiva

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

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

Diversification Opportunities for Enfusion and Workiva

-0.71

Correlation Coefficient

Enfusion  Workiva

Pay attention - limited upside

The 3 months correlation between Enfusion and Workiva is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva 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 Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of Enfusion i.e., Enfusion and Workiva go up and down completely randomly.

Pair Corralation between Enfusion and Workiva

Given the investment horizon of 90 days Enfusion is expected to generate 0.56 times more return on investment than Workiva. However, Enfusion is 1.79 times less risky than Workiva. It trades about 0.07 of its potential returns per unit of risk. Workiva is currently generating about -0.16 per unit of risk. If you would invest  1,047  in Enfusion on December 29, 2024 and sell it today you would earn a total of  67.00  from holding Enfusion or generate 6.4% return on investment over 90 days.

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

Enfusion  vs.  Workiva

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.

Workiva

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workiva has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Enfusion and Workiva

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

The idea behind Enfusion and Workiva 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.