Correlation Between Porch and Enova International

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

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

Diversification Opportunities for Porch and Enova International

0.75

Correlation Coefficient

Porch  Enova International

Poor diversification

The 3 months correlation between Porch and Enova is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Porch Group and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International and Porch 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 Porch Group are associated (or correlated) with Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Porch i.e., Porch and Enova International go up and down completely randomly.

Pair Corralation between Porch and Enova International

Given the investment horizon of 90 days Porch Group is expected to generate 2.07 times more return on investment than Enova International. However, Porch is 2.07 times more volatile than Enova International. It trades about 0.09 of its potential returns per unit of risk. Enova International is currently generating about 0.1 per unit of risk. If you would invest  1,065  in Porch Group on May 7, 2025 and sell it today you would earn a total of  221.00  from holding Porch Group or generate 20.75% return on investment over 90 days.

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

Porch Group  vs.  Enova International

Porch Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Porch Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Porch demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Enova International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enova International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Enova International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Porch and Enova International

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

The idea behind Porch Group and Enova International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.