Correlation Between CYIOS and Enova International

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Can any of the company-specific risk be diversified away by investing in both CYIOS and Enova International 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 CYIOS and Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CYIOS and Enova International, you can compare the effects of market volatilities on CYIOS and Enova International 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 CYIOS with a short position of Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CYIOS and Enova International.

Diversification Opportunities for CYIOS and Enova International

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between CYIOS and Enova is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding CYIOS and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International and CYIOS 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 CYIOS are associated (or correlated) with Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of CYIOS i.e., CYIOS and Enova International go up and down completely randomly.

Pair Corralation between CYIOS and Enova International

Given the investment horizon of 90 days CYIOS is expected to under-perform the Enova International. In addition to that, CYIOS is 3.58 times more volatile than Enova International. It trades about -0.08 of its total potential returns per unit of risk. Enova International is currently generating about 0.2 per unit of volatility. If you would invest  8,084  in Enova International on September 5, 2024 and sell it today you would earn a total of  2,523  from holding Enova International or generate 31.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CYIOS  vs.  Enova International

 Performance 
       Timeline  
CYIOS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CYIOS 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 forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Enova International 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Enova International are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Enova International sustained solid returns over the last few months and may actually be approaching a breakup point.

CYIOS and Enova International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CYIOS and Enova International

The main advantage of trading using opposite CYIOS and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CYIOS position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.
The idea behind CYIOS and Enova International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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