Correlation Between E2open Parent and CoreCard Corp

Can any of the company-specific risk be diversified away by investing in both E2open Parent and CoreCard Corp 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 E2open Parent and CoreCard Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E2open Parent Holdings and CoreCard Corp, you can compare the effects of market volatilities on E2open Parent and CoreCard Corp 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 E2open Parent with a short position of CoreCard Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of E2open Parent and CoreCard Corp.

Diversification Opportunities for E2open Parent and CoreCard Corp

0.84

Correlation Coefficient

E2open Parent  CoreCard Corp

Very poor diversification

The 3 months correlation between E2open and CoreCard is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding E2open Parent Holdings and CoreCard Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCard Corp and E2open Parent 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 E2open Parent Holdings are associated (or correlated) with CoreCard Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreCard Corp has no effect on the direction of E2open Parent i.e., E2open Parent and CoreCard Corp go up and down completely randomly.

Pair Corralation between E2open Parent and CoreCard Corp

Given the investment horizon of 90 days E2open Parent is expected to generate 1.28 times less return on investment than CoreCard Corp. In addition to that, E2open Parent is 1.15 times more volatile than CoreCard Corp. It trades about 0.17 of its total potential returns per unit of risk. CoreCard Corp is currently generating about 0.25 per unit of volatility. If you would invest  1,999  in CoreCard Corp on February 24, 2025 and sell it today you would earn a total of  571.00  from holding CoreCard Corp or generate 28.56% return on investment over 90 days.

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

E2open Parent Holdings  vs.  CoreCard Corp

E2open Parent Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in E2open Parent Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, E2open Parent displayed solid returns over the last few months and may actually be approaching a breakup point.

CoreCard Corp

Risk-Adjusted Performance

OK

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

Pair Trading with E2open Parent and CoreCard Corp

The main advantage of trading using opposite E2open Parent and CoreCard Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E2open Parent position performs unexpectedly, CoreCard Corp 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 CoreCard Corp will offset losses from the drop in CoreCard Corp's long position.

The idea behind E2open Parent Holdings and CoreCard Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.