Correlation Between Enfusion and ON24

Can any of the company-specific risk be diversified away by investing in both Enfusion and ON24 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 ON24 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enfusion and ON24 Inc, you can compare the effects of market volatilities on Enfusion and ON24 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 ON24. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enfusion and ON24.

Diversification Opportunities for Enfusion and ON24

-0.21

Correlation Coefficient

Enfusion  ON24

Very good diversification

The 3 months correlation between Enfusion and ON24 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Enfusion and ON24 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON24 Inc 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 ON24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ON24 Inc has no effect on the direction of Enfusion i.e., Enfusion and ON24 go up and down completely randomly.

Pair Corralation between Enfusion and ON24

Given the investment horizon of 90 days Enfusion is expected to generate 0.67 times more return on investment than ON24. However, Enfusion is 1.49 times less risky than ON24. It trades about 0.03 of its potential returns per unit of risk. ON24 Inc is currently generating about -0.19 per unit of risk. If you would invest  1,041  in Enfusion on January 6, 2025 and sell it today you would earn a total of  18.00  from holding Enfusion or generate 1.73% return on investment over 90 days.

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

Enfusion  vs.  ON24 Inc

Enfusion

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enfusion are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Enfusion is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ON24 Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ON24 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Enfusion and ON24

The main advantage of trading using opposite Enfusion and ON24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enfusion position performs unexpectedly, ON24 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 ON24 will offset losses from the drop in ON24's long position.

The idea behind Enfusion and ON24 Inc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.