Correlation Between Riskified and Alight
Can any of the company-specific risk be diversified away by investing in both Riskified and Alight 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 Riskified and Alight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riskified and Alight Inc, you can compare the effects of market volatilities on Riskified and Alight 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 Riskified with a short position of Alight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riskified and Alight.
Diversification Opportunities for Riskified and Alight
Significant diversification
The 3 months correlation between Riskified and Alight is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Riskified and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and Riskified 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 Riskified are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of Riskified i.e., Riskified and Alight go up and down completely randomly.
Pair Corralation between Riskified and Alight
Given the investment horizon of 90 days Riskified is expected to generate 1.8 times less return on investment than Alight. But when comparing it to its historical volatility, Riskified is 1.43 times less risky than Alight. It trades about 0.12 of its potential returns per unit of risk. Alight Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 712.00 in Alight Inc on August 30, 2024 and sell it today you would earn a total of 87.00 from holding Alight Inc or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Riskified vs. Alight Inc
Performance |
| Timeline |
| Riskified |
| Alight Inc |
Riskified and Alight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riskified and Alight
The main advantage of trading using opposite Riskified and Alight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riskified position performs unexpectedly, Alight 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 Alight will offset losses from the drop in Alight's long position.| Riskified vs. Semrush Holdings | Riskified vs. Meridianlink | Riskified vs. MondayCom | Riskified vs. SimilarWeb |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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