Correlation Between Envestnet and CXApp

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

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

Diversification Opportunities for Envestnet and CXApp

0.28

Correlation Coefficient

Envestnet  CXApp

Modest diversification

The 3 months correlation between Envestnet and CXApp is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Envestnet and CXApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CXApp Inc and Envestnet 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 Envestnet are associated (or correlated) with CXApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CXApp Inc has no effect on the direction of Envestnet i.e., Envestnet and CXApp go up and down completely randomly.

Pair Corralation between Envestnet and CXApp

Considering the 90-day investment horizon Envestnet is expected to generate 2.66 times less return on investment than CXApp. But when comparing it to its historical volatility, Envestnet is 6.65 times less risky than CXApp. It trades about 0.1 of its potential returns per unit of risk. CXApp Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  257.00  in CXApp Inc on March 19, 2024 and sell it today you would lose (19.00) from holding CXApp Inc or give up 7.39% of portfolio value over 90 days.

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

Envestnet  vs.  CXApp Inc

Envestnet

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Envestnet are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Envestnet showed solid returns over the last few months and may actually be approaching a breakup point.

CXApp Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CXApp Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, CXApp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Envestnet and CXApp

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

The idea behind Envestnet and CXApp 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.