Correlation Between Domo and Expensify
Can any of the company-specific risk be diversified away by investing in both Domo 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 Domo and Expensify into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Domo Inc and Expensify, you can compare the effects of market volatilities on Domo 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 Domo with a short position of Expensify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo and Expensify.
Diversification Opportunities for Domo and Expensify
Poor diversification
The 3 months correlation between Domo and Expensify is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify and Domo 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 Domo 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 Domo i.e., Domo and Expensify go up and down completely randomly.
Pair Corralation between Domo and Expensify
Given the investment horizon of 90 days Domo is expected to generate 5.92 times less return on investment than Expensify. But when comparing it to its historical volatility, Domo Inc is 1.4 times less risky than Expensify. It trades about 0.04 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 Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Domo Inc vs. Expensify
Performance |
Timeline |
Domo Inc |
Expensify |
Domo and Expensify Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Domo and Expensify
The main advantage of trading using opposite Domo and Expensify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo 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 Domo 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.Expensify vs. Dave Warrants | Expensify vs. Swvl Holdings Corp | Expensify vs. Guardforce AI Co | Expensify vs. Thayer Ventures Acquisition |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Transaction History View history of all your transactions and understand their impact on performance |