Correlation Between Enfusion and ZoomInfo Technologies

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

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

Diversification Opportunities for Enfusion and ZoomInfo Technologies

0.23

Correlation Coefficient

Enfusion  ZoomInfo Technologies

Modest diversification

The 3 months correlation between Enfusion and ZoomInfo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and ZoomInfo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZoomInfo Technologies 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 ZoomInfo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZoomInfo Technologies has no effect on the direction of Enfusion i.e., Enfusion and ZoomInfo Technologies go up and down completely randomly.

Pair Corralation between Enfusion and ZoomInfo Technologies

Given the investment horizon of 90 days Enfusion is expected to generate 0.48 times more return on investment than ZoomInfo Technologies. However, Enfusion is 2.07 times less risky than ZoomInfo Technologies. It trades about 0.1 of its potential returns per unit of risk. ZoomInfo Technologies is currently generating about 0.04 per unit of risk. If you would invest  951.00  in Enfusion on September 26, 2024 and sell it today you would earn a total of  101.00  from holding Enfusion or generate 10.62% return on investment over 90 days.

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

Enfusion  vs.  ZoomInfo Technologies

Enfusion

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enfusion are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Enfusion may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ZoomInfo Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZoomInfo Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, ZoomInfo Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Enfusion and ZoomInfo Technologies

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

The idea behind Enfusion and ZoomInfo Technologies 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.