Correlation Between DocuSign and Freight Technologies

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

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

Diversification Opportunities for DocuSign and Freight Technologies

-0.73

Correlation Coefficient

DocuSign  Freight Technologies

Pay attention - limited upside

The 3 months correlation between DocuSign and Freight is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding DocuSign and Freight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freight Technologies and DocuSign 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 DocuSign 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 DocuSign i.e., DocuSign and Freight Technologies go up and down completely randomly.

Pair Corralation between DocuSign and Freight Technologies

Given the investment horizon of 90 days DocuSign is expected to generate 0.3 times more return on investment than Freight Technologies. However, DocuSign is 3.34 times less risky than Freight Technologies. It trades about 0.23 of its potential returns per unit of risk. Freight Technologies is currently generating about -0.23 per unit of risk. If you would invest  5,921  in DocuSign on August 30, 2024 and sell it today you would earn a total of  2,117  from holding DocuSign or generate 35.75% return on investment over 90 days.

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

DocuSign  vs.  Freight Technologies

DocuSign

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DocuSign are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, DocuSign unveiled solid returns over the last few months and may actually be approaching a breakup point.

Freight Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freight Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with DocuSign and Freight Technologies

The main advantage of trading using opposite DocuSign and Freight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DocuSign 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.

The idea behind DocuSign and Freight Technologies 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.