Correlation Between Alkami Technology and LifeSpeak

Can any of the company-specific risk be diversified away by investing in both Alkami Technology and LifeSpeak 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 Alkami Technology and LifeSpeak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alkami Technology and LifeSpeak, you can compare the effects of market volatilities on Alkami Technology and LifeSpeak 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 Alkami Technology with a short position of LifeSpeak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkami Technology and LifeSpeak.

Diversification Opportunities for Alkami Technology and LifeSpeak

-0.35

Correlation Coefficient

Alkami Technology  LifeSpeak

Very good diversification

The 3 months correlation between Alkami and LifeSpeak is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alkami Technology and LifeSpeak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeSpeak and Alkami Technology 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 Alkami Technology are associated (or correlated) with LifeSpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeSpeak has no effect on the direction of Alkami Technology i.e., Alkami Technology and LifeSpeak go up and down completely randomly.

Pair Corralation between Alkami Technology and LifeSpeak

Given the investment horizon of 90 days Alkami Technology is expected to generate 0.51 times more return on investment than LifeSpeak. However, Alkami Technology is 1.96 times less risky than LifeSpeak. It trades about 0.14 of its potential returns per unit of risk. LifeSpeak is currently generating about -0.03 per unit of risk. If you would invest  3,154  in Alkami Technology on September 28, 2024 and sell it today you would earn a total of  735.00  from holding Alkami Technology or generate 23.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Alkami Technology  vs.  LifeSpeak

Alkami Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkami Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, Alkami Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

LifeSpeak

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LifeSpeak has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Alkami Technology and LifeSpeak

The main advantage of trading using opposite Alkami Technology and LifeSpeak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkami Technology position performs unexpectedly, LifeSpeak 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 LifeSpeak will offset losses from the drop in LifeSpeak's long position.

The idea behind Alkami Technology and LifeSpeak 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.