Correlation Between SPS Commerce and E2open Parent

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

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

Diversification Opportunities for SPS Commerce and E2open Parent

-0.25

Correlation Coefficient

SPS Commerce  E2open Parent

Very good diversification

The 3 months correlation between SPS and E2open is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SPS Commerce and E2open Parent Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E2open Parent Holdings and SPS Commerce 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 SPS Commerce are associated (or correlated) with E2open Parent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E2open Parent Holdings has no effect on the direction of SPS Commerce i.e., SPS Commerce and E2open Parent go up and down completely randomly.

Pair Corralation between SPS Commerce and E2open Parent

Given the investment horizon of 90 days SPS Commerce is expected to under-perform the E2open Parent. But the stock apears to be less risky and, when comparing its historical volatility, SPS Commerce is 1.02 times less risky than E2open Parent. The stock trades about -0.11 of its potential returns per unit of risk. The E2open Parent Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  226.00  in E2open Parent Holdings on May 3, 2025 and sell it today you would earn a total of  104.00  from holding E2open Parent Holdings or generate 46.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SPS Commerce  vs.  E2open Parent Holdings

SPS Commerce

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPS Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

E2open Parent Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E2open Parent Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, E2open Parent displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPS Commerce and E2open Parent

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

The idea behind SPS Commerce and E2open Parent Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.