Correlation Between Splunk and Edgio
Can any of the company-specific risk be diversified away by investing in both Splunk and Edgio 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 Splunk and Edgio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Splunk Inc and Edgio Inc, you can compare the effects of market volatilities on Splunk and Edgio 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 Splunk with a short position of Edgio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Splunk and Edgio.
Diversification Opportunities for Splunk and Edgio
Pay attention - limited upside
The 3 months correlation between Splunk and Edgio is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Splunk Inc and Edgio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgio Inc and Splunk 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 Splunk Inc are associated (or correlated) with Edgio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgio Inc has no effect on the direction of Splunk i.e., Splunk and Edgio go up and down completely randomly.
Pair Corralation between Splunk and Edgio
If you would invest 960.00 in Edgio Inc on November 3, 2024 and sell it today you would lose (958.00) from holding Edgio Inc or give up 99.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.5% |
| Values | Daily Returns |
Splunk Inc vs. Edgio Inc
Performance |
| Timeline |
| Splunk Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Edgio Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Splunk and Edgio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Splunk and Edgio
The main advantage of trading using opposite Splunk and Edgio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Splunk position performs unexpectedly, Edgio 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 Edgio will offset losses from the drop in Edgio's long position.| Splunk vs. Crowdstrike Holdings | Splunk vs. Adobe Systems Incorporated | Splunk vs. Palantir Technologies Class | Splunk vs. Zscaler |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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