Correlation Between Braze and Expensify
Can any of the company-specific risk be diversified away by investing in both Braze and Expensify 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 Braze and Expensify into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braze Inc and Expensify, you can compare the effects of market volatilities on Braze and Expensify 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 Braze with a short position of Expensify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braze and Expensify.
Diversification Opportunities for Braze and Expensify
Almost no diversification
The 3 months correlation between Braze and Expensify is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify and Braze 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 Braze Inc are associated (or correlated) with Expensify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expensify has no effect on the direction of Braze i.e., Braze and Expensify go up and down completely randomly.
Pair Corralation between Braze and Expensify
Given the investment horizon of 90 days Braze Inc is expected to generate 0.68 times more return on investment than Expensify. However, Braze Inc is 1.48 times less risky than Expensify. It trades about 0.07 of its potential returns per unit of risk. Expensify is currently generating about -0.11 per unit of risk. If you would invest 4,343 in Braze Inc on October 24, 2024 and sell it today you would earn a total of 109.00 from holding Braze Inc or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braze Inc vs. Expensify
Performance |
| Timeline |
| Braze Inc |
| Expensify |
Braze and Expensify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braze and Expensify
The main advantage of trading using opposite Braze and Expensify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braze position performs unexpectedly, Expensify 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 Expensify will offset losses from the drop in Expensify's long position.The idea behind Braze Inc and Expensify 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.| Expensify vs. Clearwater Analytics Holdings | Expensify vs. Sprinklr | Expensify vs. Alkami Technology | Expensify vs. Vertex |
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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