Correlation Between Enfusion and Instructure Holdings

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

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

Diversification Opportunities for Enfusion and Instructure Holdings

-0.77

Correlation Coefficient

Enfusion  Instructure Holdings

Pay attention - limited upside

The 3 months correlation between Enfusion and Instructure is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Instructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instructure Holdings 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 Instructure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instructure Holdings has no effect on the direction of Enfusion i.e., Enfusion and Instructure Holdings go up and down completely randomly.

Pair Corralation between Enfusion and Instructure Holdings

Given the investment horizon of 90 days Enfusion is expected to under-perform the Instructure Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Enfusion is 1.22 times less risky than Instructure Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The Instructure Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,130  in Instructure Holdings on March 29, 2024 and sell it today you would earn a total of  290.00  from holding Instructure Holdings or generate 13.62% return on investment over 90 days.

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

Enfusion  vs.  Instructure Holdings

Enfusion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enfusion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Instructure Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Instructure Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Instructure Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enfusion and Instructure Holdings

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

The idea behind Enfusion and Instructure Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.