Correlation Between Alkami Technology and Freshworks
Can any of the company-specific risk be diversified away by investing in both Alkami Technology and Freshworks 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 Freshworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkami Technology and Freshworks, you can compare the effects of market volatilities on Alkami Technology and Freshworks 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 Freshworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkami Technology and Freshworks.
Diversification Opportunities for Alkami Technology and Freshworks
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alkami and Freshworks is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alkami Technology and Freshworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshworks 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 Freshworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshworks has no effect on the direction of Alkami Technology i.e., Alkami Technology and Freshworks go up and down completely randomly.
Pair Corralation between Alkami Technology and Freshworks
Given the investment horizon of 90 days Alkami Technology is expected to generate 4.06 times less return on investment than Freshworks. But when comparing it to its historical volatility, Alkami Technology is 2.23 times less risky than Freshworks. It trades about 0.15 of its potential returns per unit of risk. Freshworks is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,169 in Freshworks on August 28, 2024 and sell it today you would earn a total of 476.00 from holding Freshworks or generate 40.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alkami Technology vs. Freshworks
Performance |
| Timeline |
| Alkami Technology |
| Freshworks |
Alkami Technology and Freshworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkami Technology and Freshworks
The main advantage of trading using opposite Alkami Technology and Freshworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkami Technology position performs unexpectedly, Freshworks 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 Freshworks will offset losses from the drop in Freshworks' long position.| Alkami Technology vs. Agilysys | Alkami Technology vs. ADEIA P | Alkami Technology vs. Paycor HCM | Alkami Technology vs. Paylocity Holdng |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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