Correlation Between E2open Parent and Rumble

Can any of the company-specific risk be diversified away by investing in both E2open Parent and Rumble 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 E2open Parent and Rumble into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E2open Parent Holdings and Rumble Inc, you can compare the effects of market volatilities on E2open Parent and Rumble 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 E2open Parent with a short position of Rumble. Check out your portfolio center. Please also check ongoing floating volatility patterns of E2open Parent and Rumble.

Diversification Opportunities for E2open Parent and Rumble

-0.57

Correlation Coefficient

E2open Parent  Rumble

Excellent diversification

The 3 months correlation between E2open and Rumble is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding E2open Parent Holdings and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble Inc and E2open Parent 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 E2open Parent Holdings are associated (or correlated) with Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of E2open Parent i.e., E2open Parent and Rumble go up and down completely randomly.

Pair Corralation between E2open Parent and Rumble

Given the investment horizon of 90 days E2open Parent Holdings is expected to under-perform the Rumble. But the stock apears to be less risky and, when comparing its historical volatility, E2open Parent Holdings is 3.15 times less risky than Rumble. The stock trades about -0.11 of its potential returns per unit of risk. The Rumble Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  537.00  in Rumble Inc on October 6, 2024 and sell it today you would earn a total of  806.00  from holding Rumble Inc or generate 150.09% return on investment over 90 days.

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

E2open Parent Holdings  vs.  Rumble Inc

E2open Parent Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E2open Parent Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Rumble Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Rumble displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with E2open Parent and Rumble

The main advantage of trading using opposite E2open Parent and Rumble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E2open Parent position performs unexpectedly, Rumble 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 Rumble will offset losses from the drop in Rumble's long position.

The idea behind E2open Parent Holdings and Rumble Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..