Correlation Between Freshworks and VTEX
Can any of the company-specific risk be diversified away by investing in both Freshworks and VTEX 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 VTEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freshworks and VTEX, you can compare the effects of market volatilities on Freshworks and VTEX 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 VTEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freshworks and VTEX.
Diversification Opportunities for Freshworks and VTEX
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freshworks and VTEX is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Freshworks and VTEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTEX 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 VTEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTEX has no effect on the direction of Freshworks i.e., Freshworks and VTEX go up and down completely randomly.
Pair Corralation between Freshworks and VTEX
Given the investment horizon of 90 days Freshworks is expected to generate 4.33 times more return on investment than VTEX. However, Freshworks is 4.33 times more volatile than VTEX. It trades about 0.3 of its potential returns per unit of risk. VTEX is currently generating about -0.08 per unit of risk. If you would invest 1,116 in Freshworks on August 24, 2024 and sell it today you would earn a total of 540.00 from holding Freshworks or generate 48.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freshworks vs. VTEX
Performance |
| Timeline |
| Freshworks |
| VTEX |
Freshworks and VTEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freshworks and VTEX
The main advantage of trading using opposite Freshworks and VTEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freshworks position performs unexpectedly, VTEX 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 VTEX will offset losses from the drop in VTEX's long position.| Freshworks vs. Alkami Technology | Freshworks vs. Paycor HCM | Freshworks vs. Procore Technologies | Freshworks vs. Enfusion |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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