Correlation Between Enova International and Associates First

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

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

Diversification Opportunities for Enova International and Associates First

0.08

Correlation Coefficient

Enova International  Associates First

Significant diversification

The 3 months correlation between Enova and Associates is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Enova International and Associates First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associates First Capital and Enova International 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 Enova International are associated (or correlated) with Associates First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associates First Capital has no effect on the direction of Enova International i.e., Enova International and Associates First go up and down completely randomly.

Pair Corralation between Enova International and Associates First

If you would invest  8,239  in Enova International on September 3, 2024 and sell it today you would earn a total of  2,312  from holding Enova International or generate 28.06% return on investment over 90 days.

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

Enova International  vs.  Associates First Capital

Enova International

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enova International are ranked lower than 14 (%) 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.

Associates First Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Associates First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Associates First is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enova International and Associates First

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

The idea behind Enova International and Associates First Capital 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.