Correlation Between Manhattan Associates and Alkami Technology

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

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

Diversification Opportunities for Manhattan Associates and Alkami Technology

0.29

Correlation Coefficient

Manhattan Associates  Alkami Technology

Modest diversification

The 3 months correlation between Manhattan and Alkami is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and Alkami Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkami Technology and Manhattan Associates 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 Manhattan Associates are associated (or correlated) with Alkami Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkami Technology has no effect on the direction of Manhattan Associates i.e., Manhattan Associates and Alkami Technology go up and down completely randomly.

Pair Corralation between Manhattan Associates and Alkami Technology

Given the investment horizon of 90 days Manhattan Associates is expected to generate 1.94 times less return on investment than Alkami Technology. But when comparing it to its historical volatility, Manhattan Associates is 1.39 times less risky than Alkami Technology. It trades about 0.08 of its potential returns per unit of risk. Alkami Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,334  in Alkami Technology on August 30, 2024 and sell it today you would earn a total of  594.00  from holding Alkami Technology or generate 17.82% return on investment over 90 days.

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

Manhattan Associates  vs.  Alkami Technology

Manhattan Associates

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Manhattan Associates may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Alkami Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkami Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Alkami Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manhattan Associates and Alkami Technology

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

The idea behind Manhattan Associates and Alkami Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.