Correlation Between 8x8 Common and Braze

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Can any of the company-specific risk be diversified away by investing in both 8x8 Common 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 8x8 Common and Braze into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 8x8 Common Stock and Braze Inc, you can compare the effects of market volatilities on 8x8 Common 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 8x8 Common with a short position of Braze. Check out your portfolio center. Please also check ongoing floating volatility patterns of 8x8 Common and Braze.

Diversification Opportunities for 8x8 Common and Braze

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between 8x8 and Braze is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding 8x8 Common Stock and Braze Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braze Inc and 8x8 Common 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 8x8 Common Stock 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 8x8 Common i.e., 8x8 Common and Braze go up and down completely randomly.

Pair Corralation between 8x8 Common and Braze

Given the investment horizon of 90 days 8x8 Common Stock is expected to generate 1.99 times more return on investment than Braze. However, 8x8 Common is 1.99 times more volatile than Braze Inc. It trades about 0.35 of its potential returns per unit of risk. Braze Inc is currently generating about 0.48 per unit of risk. If you would invest  223.00  in 8x8 Common Stock on September 1, 2024 and sell it today you would earn a total of  87.00  from holding 8x8 Common Stock or generate 39.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

8x8 Common Stock  vs.  Braze Inc

 Performance 
       Timeline  
8x8 Common Stock 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in 8x8 Common Stock are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, 8x8 Common unveiled solid returns over the last few months and may actually be approaching a breakup point.
Braze Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Braze Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Braze is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

8x8 Common and Braze Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 8x8 Common and Braze

The main advantage of trading using opposite 8x8 Common and Braze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 8x8 Common 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 8x8 Common Stock 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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