Correlation Between Riskified and Sprout Social
Can any of the company-specific risk be diversified away by investing in both Riskified and Sprout Social 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 Sprout Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riskified and Sprout Social, you can compare the effects of market volatilities on Riskified and Sprout Social 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 Sprout Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riskified and Sprout Social.
Diversification Opportunities for Riskified and Sprout Social
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Riskified and Sprout is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Riskified and Sprout Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprout Social 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 Sprout Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprout Social has no effect on the direction of Riskified i.e., Riskified and Sprout Social go up and down completely randomly.
Pair Corralation between Riskified and Sprout Social
Given the investment horizon of 90 days Riskified is expected to generate 2.26 times less return on investment than Sprout Social. But when comparing it to its historical volatility, Riskified is 1.56 times less risky than Sprout Social. It trades about 0.12 of its potential returns per unit of risk. Sprout Social is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,744 in Sprout Social on August 30, 2024 and sell it today you would earn a total of 425.00 from holding Sprout Social or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Riskified vs. Sprout Social
Performance |
| Timeline |
| Riskified |
| Sprout Social |
Riskified and Sprout Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riskified and Sprout Social
The main advantage of trading using opposite Riskified and Sprout Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riskified position performs unexpectedly, Sprout Social 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 Sprout Social will offset losses from the drop in Sprout Social's long position.| Riskified vs. Semrush Holdings | Riskified vs. Meridianlink | Riskified vs. MondayCom | Riskified vs. SimilarWeb |
| Sprout Social vs. Zoom Video Communications | Sprout Social vs. C3 Ai Inc | Sprout Social vs. Shopify | Sprout Social vs. Workday |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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