Correlation Between Riskified and Expensify
Can any of the company-specific risk be diversified away by investing in both Riskified 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 Riskified and Expensify into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riskified and Expensify, you can compare the effects of market volatilities on Riskified 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 Riskified with a short position of Expensify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riskified and Expensify.
Diversification Opportunities for Riskified and Expensify
Very weak diversification
The 3 months correlation between Riskified and Expensify is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Riskified and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify 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 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 Riskified i.e., Riskified and Expensify go up and down completely randomly.
Pair Corralation between Riskified and Expensify
Given the investment horizon of 90 days Riskified is expected to generate 0.49 times more return on investment than Expensify. However, Riskified is 2.06 times less risky than Expensify. It trades about 0.01 of its potential returns per unit of risk. Expensify is currently generating about 0.0 per unit of risk. If you would invest 567.00 in Riskified on December 4, 2024 and sell it today you would lose (52.00) from holding Riskified or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Riskified vs. Expensify
Performance |
| Timeline |
| Riskified |
| Expensify |
Riskified and Expensify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riskified and Expensify
The main advantage of trading using opposite Riskified and Expensify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riskified 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.| Riskified vs. Semrush Holdings | ||
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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