Correlation Between Calix and Expensify

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

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

Diversification Opportunities for Calix and Expensify

-0.7

Correlation Coefficient

Calix  Expensify

Excellent diversification

The 3 months correlation between Calix and Expensify is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Calix Inc and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify and Calix 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 Calix Inc are associated (or correlated) with Expensify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expensify has no effect on the direction of Calix i.e., Calix and Expensify go up and down completely randomly.

Pair Corralation between Calix and Expensify

Given the investment horizon of 90 days Calix is expected to generate 100.4 times less return on investment than Expensify. But when comparing it to its historical volatility, Calix Inc is 1.65 times less risky than Expensify. It trades about 0.0 of its potential returns per unit of risk. Expensify is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  252.00  in Expensify on September 13, 2024 and sell it today you would earn a total of  133.00  from holding Expensify or generate 52.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Calix Inc  vs.  Expensify

Calix Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calix Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Calix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Expensify

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Expensify are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Expensify showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calix and Expensify

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

The idea behind Calix Inc and Expensify 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.