Correlation Between Shopify and Presto Automation
Can any of the company-specific risk be diversified away by investing in both Shopify and Presto Automation 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 Shopify and Presto Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shopify and Presto Automation, you can compare the effects of market volatilities on Shopify and Presto Automation 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 Shopify with a short position of Presto Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shopify and Presto Automation.
Diversification Opportunities for Shopify and Presto Automation
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shopify and Presto is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shopify and Presto Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Presto Automation and Shopify 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 Shopify are associated (or correlated) with Presto Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Presto Automation has no effect on the direction of Shopify i.e., Shopify and Presto Automation go up and down completely randomly.
Pair Corralation between Shopify and Presto Automation
Given the investment horizon of 90 days Shopify is expected to generate 0.24 times more return on investment than Presto Automation. However, Shopify is 4.11 times less risky than Presto Automation. It trades about 0.07 of its potential returns per unit of risk. Presto Automation is currently generating about -0.08 per unit of risk. If you would invest 5,928 in Shopify on August 31, 2024 and sell it today you would earn a total of 5,632 from holding Shopify or generate 95.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 79.68% |
| Values | Daily Returns |
Shopify vs. Presto Automation
Performance |
| Timeline |
| Shopify |
| Presto Automation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shopify and Presto Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shopify and Presto Automation
The main advantage of trading using opposite Shopify and Presto Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shopify position performs unexpectedly, Presto Automation 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 Presto Automation will offset losses from the drop in Presto Automation's long position.The idea behind Shopify and Presto Automation 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.| Presto Automation vs. CXApp Inc | Presto Automation vs. Bullfrog AI Holdings, | Presto Automation vs. Guardforce AI Co | Presto Automation vs. Dermata Therapeutics |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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