Correlation Between Expensify and Progress Software

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

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

Diversification Opportunities for Expensify and Progress Software

0.46

Correlation Coefficient

Expensify  Progress Software

Very weak diversification

The 3 months correlation between Expensify and Progress is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Progress Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progress Software and Expensify 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 Expensify are associated (or correlated) with Progress Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progress Software has no effect on the direction of Expensify i.e., Expensify and Progress Software go up and down completely randomly.

Pair Corralation between Expensify and Progress Software

Given the investment horizon of 90 days Expensify is expected to generate 2.38 times more return on investment than Progress Software. However, Expensify is 2.38 times more volatile than Progress Software. It trades about 0.2 of its potential returns per unit of risk. Progress Software is currently generating about 0.15 per unit of risk. If you would invest  225.00  in Expensify on September 15, 2024 and sell it today you would earn a total of  162.00  from holding Expensify or generate 72.0% return on investment over 90 days.

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

Expensify  vs.  Progress Software

Expensify

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Expensify are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Expensify showed solid returns over the last few months and may actually be approaching a breakup point.

Progress Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progress Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Progress Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expensify and Progress Software

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

The idea behind Expensify and Progress Software 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.