Correlation Between Friendable and Alkami Technology

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

Diversification Opportunities for Friendable and Alkami Technology

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Friendable and Alkami is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Friendable and Alkami Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkami Technology and Friendable 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 Friendable are associated (or correlated) with Alkami Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkami Technology has no effect on the direction of Friendable i.e., Friendable and Alkami Technology go up and down completely randomly.

Pair Corralation between Friendable and Alkami Technology

If you would invest  3,877  in Alkami Technology on August 29, 2024 and sell it today you would earn a total of  92.00  from holding Alkami Technology or generate 2.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Friendable  vs.  Alkami Technology

 Performance 
       Timeline  
Friendable 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Friendable are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Friendable disclosed solid returns over the last few months and may actually be approaching a breakup point.
Alkami Technology 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Alkami Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Alkami Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Friendable and Alkami Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Friendable and Alkami Technology

The main advantage of trading using opposite Friendable and Alkami Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Friendable position performs unexpectedly, Alkami Technology 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 Alkami Technology will offset losses from the drop in Alkami Technology's long position.
The idea behind Friendable and Alkami Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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