Correlation Between EPlus and Alkami Technology
Can any of the company-specific risk be diversified away by investing in both EPlus 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 EPlus and Alkami Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ePlus inc and Alkami Technology, you can compare the effects of market volatilities on EPlus 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 EPlus with a short position of Alkami Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPlus and Alkami Technology.
Diversification Opportunities for EPlus and Alkami Technology
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between EPlus and Alkami is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Alkami Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkami Technology and EPlus 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 ePlus inc 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 EPlus i.e., EPlus and Alkami Technology go up and down completely randomly.
Pair Corralation between EPlus and Alkami Technology
Given the investment horizon of 90 days EPlus is expected to generate 1.91 times less return on investment than Alkami Technology. But when comparing it to its historical volatility, ePlus inc is 1.07 times less risky than Alkami Technology. It trades about 0.06 of its potential returns per unit of risk. Alkami Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,273 in Alkami Technology on August 24, 2024 and sell it today you would earn a total of 2,601 from holding Alkami Technology or generate 204.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ePlus inc vs. Alkami Technology
Performance |
| Timeline |
| ePlus inc |
| Alkami Technology |
EPlus and Alkami Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPlus and Alkami Technology
The main advantage of trading using opposite EPlus and Alkami Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPlus 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 ePlus inc 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.| Alkami Technology vs. Agilysys | Alkami Technology vs. ADEIA P | Alkami Technology vs. Paycor HCM | Alkami Technology vs. Paylocity Holdng |
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 CEOs Directory module to screen CEOs from public companies around the world.
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