Correlation Between Alkami Technology and Braze

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Can any of the company-specific risk be diversified away by investing in both Alkami Technology and Braze 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 Alkami Technology and Braze into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkami Technology and Braze Inc, you can compare the effects of market volatilities on Alkami Technology and Braze 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 Alkami Technology with a short position of Braze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkami Technology and Braze.

Diversification Opportunities for Alkami Technology and Braze

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Alkami and Braze is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alkami Technology and Braze Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braze Inc and Alkami Technology 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 Alkami Technology are associated (or correlated) with Braze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braze Inc has no effect on the direction of Alkami Technology i.e., Alkami Technology and Braze go up and down completely randomly.

Pair Corralation between Alkami Technology and Braze

Given the investment horizon of 90 days Alkami Technology is expected to generate 0.86 times more return on investment than Braze. However, Alkami Technology is 1.16 times less risky than Braze. It trades about 0.07 of its potential returns per unit of risk. Braze Inc is currently generating about 0.04 per unit of risk. If you would invest  1,645  in Alkami Technology on October 20, 2024 and sell it today you would earn a total of  1,907  from holding Alkami Technology or generate 115.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Alkami Technology  vs.  Braze Inc

 Performance 
       Timeline  
Alkami Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Alkami Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Alkami Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Braze Inc 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Braze Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Braze exhibited solid returns over the last few months and may actually be approaching a breakup point.

Alkami Technology and Braze Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alkami Technology and Braze

The main advantage of trading using opposite Alkami Technology and Braze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkami Technology position performs unexpectedly, Braze 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 Braze will offset losses from the drop in Braze's long position.
The idea behind Alkami Technology and Braze 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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