Correlation Between Shotspotter and Freight Technologies
Can any of the company-specific risk be diversified away by investing in both Shotspotter and Freight Technologies 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 Shotspotter and Freight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shotspotter and Freight Technologies, you can compare the effects of market volatilities on Shotspotter and Freight Technologies 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 Shotspotter with a short position of Freight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shotspotter and Freight Technologies.
Diversification Opportunities for Shotspotter and Freight Technologies
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shotspotter and Freight is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shotspotter and Freight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freight Technologies and Shotspotter 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 Shotspotter are associated (or correlated) with Freight Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freight Technologies has no effect on the direction of Shotspotter i.e., Shotspotter and Freight Technologies go up and down completely randomly.
Pair Corralation between Shotspotter and Freight Technologies
Given the investment horizon of 90 days Shotspotter is expected to generate 0.42 times more return on investment than Freight Technologies. However, Shotspotter is 2.39 times less risky than Freight Technologies. It trades about -0.03 of its potential returns per unit of risk. Freight Technologies is currently generating about -0.1 per unit of risk. If you would invest 3,342 in Shotspotter on August 28, 2024 and sell it today you would lose (2,034) from holding Shotspotter or give up 60.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shotspotter vs. Freight Technologies
Performance |
| Timeline |
| Shotspotter |
| Freight Technologies |
Shotspotter and Freight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shotspotter and Freight Technologies
The main advantage of trading using opposite Shotspotter and Freight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shotspotter position performs unexpectedly, Freight Technologies 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 Freight Technologies will offset losses from the drop in Freight Technologies' long position.| Shotspotter vs. Enfusion | Shotspotter vs. ON24 Inc | Shotspotter vs. Paycor HCM | Shotspotter vs. Research Solutions |
| Freight Technologies vs. OLB Group | Freight Technologies vs. Friendable | Freight Technologies vs. KwikClick |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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