Correlation Between Sprinklr and Expensify
Can any of the company-specific risk be diversified away by investing in both Sprinklr 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 Sprinklr and Expensify into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprinklr and Expensify, you can compare the effects of market volatilities on Sprinklr 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 Sprinklr with a short position of Expensify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprinklr and Expensify.
Diversification Opportunities for Sprinklr and Expensify
Very weak diversification
The 3 months correlation between Sprinklr and Expensify is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sprinklr and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify and Sprinklr 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 Sprinklr 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 Sprinklr i.e., Sprinklr and Expensify go up and down completely randomly.
Pair Corralation between Sprinklr and Expensify
Considering the 90-day investment horizon Sprinklr is expected to under-perform the Expensify. But the stock apears to be less risky and, when comparing its historical volatility, Sprinklr is 2.45 times less risky than Expensify. The stock trades about -0.08 of its potential returns per unit of risk. The Expensify is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Expensify on August 27, 2024 and sell it today you would earn a total of 132.00 from holding Expensify or generate 63.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprinklr vs. Expensify
Performance |
| Timeline |
| Sprinklr |
| Expensify |
Sprinklr and Expensify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprinklr and Expensify
The main advantage of trading using opposite Sprinklr and Expensify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprinklr 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 Sprinklr 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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