Correlation Between Enfusion and Manhattan Associates

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

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

Diversification Opportunities for Enfusion and Manhattan Associates

0.49

Correlation Coefficient

Enfusion  Manhattan Associates

Very weak diversification

The 3 months correlation between Enfusion and Manhattan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates 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 Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of Enfusion i.e., Enfusion and Manhattan Associates go up and down completely randomly.

Pair Corralation between Enfusion and Manhattan Associates

Given the investment horizon of 90 days Enfusion is expected to generate 15.68 times less return on investment than Manhattan Associates. In addition to that, Enfusion is 1.35 times more volatile than Manhattan Associates. It trades about 0.01 of its total potential returns per unit of risk. Manhattan Associates is currently generating about 0.11 per unit of volatility. If you would invest  11,977  in Manhattan Associates on August 31, 2024 and sell it today you would earn a total of  16,791  from holding Manhattan Associates or generate 140.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Enfusion  vs.  Manhattan Associates

Enfusion

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enfusion are ranked lower than 13 (%) 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.

Manhattan Associates

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Manhattan Associates demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enfusion and Manhattan Associates

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

The idea behind Enfusion and Manhattan Associates 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.