Correlation Between MondayCom and Expensify
Can any of the company-specific risk be diversified away by investing in both MondayCom and Expensify 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 MondayCom and Expensify into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MondayCom and Expensify, you can compare the effects of market volatilities on MondayCom and Expensify 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 MondayCom with a short position of Expensify. Check out your portfolio center. Please also check ongoing floating volatility patterns of MondayCom and Expensify.
Diversification Opportunities for MondayCom and Expensify
Very good diversification
The 3 months correlation between MondayCom and Expensify is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding MondayCom and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify and MondayCom 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 MondayCom are associated (or correlated) with Expensify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expensify has no effect on the direction of MondayCom i.e., MondayCom and Expensify go up and down completely randomly.
Pair Corralation between MondayCom and Expensify
Given the investment horizon of 90 days MondayCom is expected to generate 36.16 times less return on investment than Expensify. But when comparing it to its historical volatility, MondayCom is 1.48 times less risky than Expensify. It trades about 0.02 of its potential returns per unit of risk. Expensify is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 184.00 in Expensify on August 28, 2024 and sell it today you would earn a total of 143.00 from holding Expensify or generate 77.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MondayCom vs. Expensify
Performance |
| Timeline |
| MondayCom |
| Expensify |
MondayCom and Expensify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MondayCom and Expensify
The main advantage of trading using opposite MondayCom and Expensify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MondayCom position performs unexpectedly, Expensify 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 Expensify will offset losses from the drop in Expensify's long position.The idea behind MondayCom and Expensify 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.| Expensify vs. Clearwater Analytics Holdings | Expensify vs. Sprinklr | Expensify vs. Alkami Technology | Expensify vs. Vertex |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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