Correlation Between Friendable and Sprout Social
Can any of the company-specific risk be diversified away by investing in both Friendable 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 Friendable and Sprout Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Friendable and Sprout Social, you can compare the effects of market volatilities on Friendable 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 Friendable with a short position of Sprout Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Friendable and Sprout Social.
Diversification Opportunities for Friendable and Sprout Social
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Friendable and Sprout is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Friendable and Sprout Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprout Social 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 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 Friendable i.e., Friendable and Sprout Social go up and down completely randomly.
Pair Corralation between Friendable and Sprout Social
Given the investment horizon of 90 days Friendable is expected to generate 5.18 times more return on investment than Sprout Social. However, Friendable is 5.18 times more volatile than Sprout Social. It trades about 0.07 of its potential returns per unit of risk. Sprout Social is currently generating about 0.08 per unit of risk. If you would invest 0.01 in Friendable on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Friendable or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Friendable vs. Sprout Social
Performance |
| Timeline |
| Friendable |
| Sprout Social |
Friendable and Sprout Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Friendable and Sprout Social
The main advantage of trading using opposite Friendable and Sprout Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Friendable 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.| Friendable vs. RenoWorks Software | Friendable vs. LifeSpeak | Friendable vs. 01 Communique Laboratory | Friendable vs. On4 Communications |
| Sprout Social vs. C3 Ai Inc | Sprout Social vs. Shopify | Sprout Social vs. Workday | Sprout Social vs. Intuit Inc |
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.
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