Correlation Between Allegiant Gold and Enghouse Systems

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

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

Diversification Opportunities for Allegiant Gold and Enghouse Systems

-0.75

Correlation Coefficient

Allegiant Gold  Enghouse Systems

Pay attention - limited upside

The 3 months correlation between Allegiant and Enghouse is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Gold and Enghouse Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enghouse Systems and Allegiant Gold 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 Allegiant Gold 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 Allegiant Gold i.e., Allegiant Gold and Enghouse Systems go up and down completely randomly.

Pair Corralation between Allegiant Gold and Enghouse Systems

Assuming the 90 days trading horizon Allegiant Gold is expected to generate 11.27 times more return on investment than Enghouse Systems. However, Allegiant Gold is 11.27 times more volatile than Enghouse Systems. It trades about 0.19 of its potential returns per unit of risk. Enghouse Systems is currently generating about -0.02 per unit of risk. If you would invest  14.00  in Allegiant Gold on April 25, 2025 and sell it today you would earn a total of  46.00  from holding Allegiant Gold or generate 328.57% return on investment over 90 days.

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

Allegiant Gold  vs.  Enghouse Systems

Allegiant Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allegiant Gold are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Allegiant Gold showed 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 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Enghouse Systems is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Allegiant Gold and Enghouse Systems

The main advantage of trading using opposite Allegiant Gold and Enghouse Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Gold 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 Allegiant Gold and Enghouse Systems 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.