Correlation Between 01 Communique and Enghouse Systems

Can any of the company-specific risk be diversified away by investing in both 01 Communique and Enghouse Systems 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 01 Communique and Enghouse Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 01 Communique Laboratory and Enghouse Systems Limited, you can compare the effects of market volatilities on 01 Communique and Enghouse Systems 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 01 Communique with a short position of Enghouse Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of 01 Communique and Enghouse Systems.

Diversification Opportunities for 01 Communique and Enghouse Systems

-0.64

Correlation Coefficient

01 Communique  Enghouse Systems

Excellent diversification

The 3 months correlation between OONEF and Enghouse is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding 01 Communique Laboratory and Enghouse Systems Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enghouse Systems and 01 Communique 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 01 Communique Laboratory are associated (or correlated) with Enghouse Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enghouse Systems has no effect on the direction of 01 Communique i.e., 01 Communique and Enghouse Systems go up and down completely randomly.

Pair Corralation between 01 Communique and Enghouse Systems

Assuming the 90 days horizon 01 Communique Laboratory is expected to generate 3.66 times more return on investment than Enghouse Systems. However, 01 Communique is 3.66 times more volatile than Enghouse Systems Limited. It trades about 0.18 of its potential returns per unit of risk. Enghouse Systems Limited is currently generating about -0.07 per unit of risk. If you would invest  18.00  in 01 Communique Laboratory on May 4, 2025 and sell it today you would earn a total of  15.00  from holding 01 Communique Laboratory or generate 83.33% return on investment over 90 days.

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

01 Communique Laboratory  vs.  Enghouse Systems Limited

01 Communique Laboratory

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 01 Communique Laboratory are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, 01 Communique reported solid returns over the last few months and may actually be approaching a breakup point.

Enghouse Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enghouse Systems Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with 01 Communique and Enghouse Systems

The main advantage of trading using opposite 01 Communique and Enghouse Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 01 Communique position performs unexpectedly, Enghouse Systems 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 Enghouse Systems will offset losses from the drop in Enghouse Systems' long position.

The idea behind 01 Communique Laboratory and Enghouse Systems Limited 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.