Correlation Between Freshworks and Model N
Can any of the company-specific risk be diversified away by investing in both Freshworks and Model N 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 Freshworks and Model N into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freshworks and Model N, you can compare the effects of market volatilities on Freshworks and Model N 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 Freshworks with a short position of Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freshworks and Model N.
Diversification Opportunities for Freshworks and Model N
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Freshworks and Model is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Freshworks and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N and Freshworks 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 Freshworks are associated (or correlated) with Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Freshworks i.e., Freshworks and Model N go up and down completely randomly.
Pair Corralation between Freshworks and Model N
Given the investment horizon of 90 days Freshworks is expected to generate 1.4 times more return on investment than Model N. However, Freshworks is 1.4 times more volatile than Model N. It trades about 0.02 of its potential returns per unit of risk. Model N is currently generating about -0.02 per unit of risk. If you would invest 1,472 in Freshworks on August 30, 2024 and sell it today you would earn a total of 111.00 from holding Freshworks or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.38% |
| Values | Daily Returns |
Freshworks vs. Model N
Performance |
| Timeline |
| Freshworks |
| Model N |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Freshworks and Model N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freshworks and Model N
The main advantage of trading using opposite Freshworks and Model N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freshworks position performs unexpectedly, Model N 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 Model N will offset losses from the drop in Model N's long position.| Freshworks vs. Marin Software | Freshworks vs. EzFill Holdings | Freshworks vs. Trust Stamp | Freshworks vs. Infobird Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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