Correlation Between Affirm Holdings and Confluent
Can any of the company-specific risk be diversified away by investing in both Affirm Holdings and Confluent 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 Affirm Holdings and Confluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affirm Holdings and Confluent, you can compare the effects of market volatilities on Affirm Holdings and Confluent 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 Affirm Holdings with a short position of Confluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affirm Holdings and Confluent.
Diversification Opportunities for Affirm Holdings and Confluent
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Affirm and Confluent is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Affirm Holdings and Confluent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Confluent and Affirm Holdings 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 Affirm Holdings are associated (or correlated) with Confluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Confluent has no effect on the direction of Affirm Holdings i.e., Affirm Holdings and Confluent go up and down completely randomly.
Pair Corralation between Affirm Holdings and Confluent
Given the investment horizon of 90 days Affirm Holdings is expected to under-perform the Confluent. In addition to that, Affirm Holdings is 1.43 times more volatile than Confluent. It trades about -0.2 of its total potential returns per unit of risk. Confluent is currently generating about -0.18 per unit of volatility. If you would invest 2,995 in Confluent on October 23, 2024 and sell it today you would lose (244.00) from holding Confluent or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affirm Holdings vs. Confluent
Performance |
| Timeline |
| Affirm Holdings |
| Confluent |
Affirm Holdings and Confluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affirm Holdings and Confluent
The main advantage of trading using opposite Affirm Holdings and Confluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affirm Holdings position performs unexpectedly, Confluent 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 Confluent will offset losses from the drop in Confluent's long position.| Affirm Holdings vs. Upstart Holdings | Affirm Holdings vs. SoFi Technologies | Affirm Holdings vs. Roblox Corp | Affirm Holdings vs. Robinhood Markets |
| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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