Correlation Between PTC and Enfusion

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

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

Diversification Opportunities for PTC and Enfusion

0.76

Correlation Coefficient

PTC  Enfusion

Poor diversification

The 3 months correlation between PTC and Enfusion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PTC Inc and Enfusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enfusion and PTC 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 PTC 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 PTC i.e., PTC and Enfusion go up and down completely randomly.

Pair Corralation between PTC and Enfusion

Considering the 90-day investment horizon PTC Inc is expected to under-perform the Enfusion. But the stock apears to be less risky and, when comparing its historical volatility, PTC Inc is 1.13 times less risky than Enfusion. The stock trades about 0.0 of its potential returns per unit of risk. The Enfusion is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  964.00  in Enfusion on September 20, 2024 and sell it today you would earn a total of  139.00  from holding Enfusion or generate 14.42% return on investment over 90 days.

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

PTC Inc  vs.  Enfusion

PTC Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, PTC may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Enfusion

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enfusion are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, Enfusion displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTC and Enfusion

The main advantage of trading using opposite PTC and Enfusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTC 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 PTC 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.