Correlation Between EPlus and Enfusion

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

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

Diversification Opportunities for EPlus and Enfusion

-0.63

Correlation Coefficient

EPlus  Enfusion

Excellent diversification

The 3 months correlation between EPlus and Enfusion is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Enfusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enfusion and EPlus 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 ePlus inc are associated (or correlated) with Enfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enfusion has no effect on the direction of EPlus i.e., EPlus and Enfusion go up and down completely randomly.

Pair Corralation between EPlus and Enfusion

Given the investment horizon of 90 days ePlus inc is expected to under-perform the Enfusion. In addition to that, EPlus is 1.46 times more volatile than Enfusion. It trades about -0.06 of its total potential returns per unit of risk. Enfusion is currently generating about 0.22 per unit of volatility. If you would invest  821.00  in Enfusion on September 13, 2024 and sell it today you would earn a total of  244.00  from holding Enfusion or generate 29.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

ePlus inc  vs.  Enfusion

ePlus inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ePlus inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Enfusion

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enfusion are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Enfusion displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EPlus and Enfusion

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

The idea behind ePlus inc and Enfusion 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.