Correlation Between Akamai Technologies and Squarespace
Can any of the company-specific risk be diversified away by investing in both Akamai Technologies and Squarespace 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 Akamai Technologies and Squarespace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akamai Technologies and Squarespace, you can compare the effects of market volatilities on Akamai Technologies and Squarespace 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 Akamai Technologies with a short position of Squarespace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akamai Technologies and Squarespace.
Diversification Opportunities for Akamai Technologies and Squarespace
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Akamai and Squarespace is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies and Squarespace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Squarespace and Akamai Technologies 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 Akamai Technologies are associated (or correlated) with Squarespace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Squarespace has no effect on the direction of Akamai Technologies i.e., Akamai Technologies and Squarespace go up and down completely randomly.
Pair Corralation between Akamai Technologies and Squarespace
Given the investment horizon of 90 days Akamai Technologies is expected to generate 111.35 times less return on investment than Squarespace. But when comparing it to its historical volatility, Akamai Technologies is 1.32 times less risky than Squarespace. It trades about 0.0 of its potential returns per unit of risk. Squarespace is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,150 in Squarespace on August 23, 2024 and sell it today you would earn a total of 2,507 from holding Squarespace or generate 116.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.96% |
| Values | Daily Returns |
Akamai Technologies vs. Squarespace
Performance |
| Timeline |
| Akamai Technologies |
| Squarespace |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Akamai Technologies and Squarespace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akamai Technologies and Squarespace
The main advantage of trading using opposite Akamai Technologies and Squarespace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akamai Technologies position performs unexpectedly, Squarespace 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 Squarespace will offset losses from the drop in Squarespace's long position.| Akamai Technologies vs. Check Point Software | Akamai Technologies vs. VeriSign | Akamai Technologies vs. Qualys Inc | Akamai Technologies vs. F5 Networks |
| Squarespace vs. Wex Inc | Squarespace vs. CSG Systems International | Squarespace vs. VeriSign | Squarespace vs. Evertec |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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