Correlation Between Braze and Sprout Social
Can any of the company-specific risk be diversified away by investing in both Braze and Sprout Social 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 Sprout Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braze Inc and Sprout Social, you can compare the effects of market volatilities on Braze and Sprout Social 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 Sprout Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braze and Sprout Social.
Diversification Opportunities for Braze and Sprout Social
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Braze and Sprout is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Sprout Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprout Social 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 Sprout Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprout Social has no effect on the direction of Braze i.e., Braze and Sprout Social go up and down completely randomly.
Pair Corralation between Braze and Sprout Social
Given the investment horizon of 90 days Braze is expected to generate 1.17 times less return on investment than Sprout Social. In addition to that, Braze is 1.09 times more volatile than Sprout Social. It trades about 0.07 of its total potential returns per unit of risk. Sprout Social is currently generating about 0.09 per unit of volatility. If you would invest 3,206 in Sprout Social on October 24, 2024 and sell it today you would earn a total of 99.00 from holding Sprout Social or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braze Inc vs. Sprout Social
Performance |
| Timeline |
| Braze Inc |
| Sprout Social |
Braze and Sprout Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braze and Sprout Social
The main advantage of trading using opposite Braze and Sprout Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braze position performs unexpectedly, Sprout Social 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 Sprout Social will offset losses from the drop in Sprout Social's long position.The idea behind Braze Inc and Sprout Social 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.| Sprout Social vs. Progyny | Sprout Social vs. Endava | Sprout Social vs. Goosehead Insurance | Sprout Social vs. Sitime |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |