Correlation Between Remitly Global and Edgio
Can any of the company-specific risk be diversified away by investing in both Remitly Global and Edgio 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 Remitly Global and Edgio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Remitly Global and Edgio Inc, you can compare the effects of market volatilities on Remitly Global and Edgio 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 Remitly Global with a short position of Edgio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remitly Global and Edgio.
Diversification Opportunities for Remitly Global and Edgio
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Remitly and Edgio is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Remitly Global and Edgio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgio Inc and Remitly Global 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 Remitly Global are associated (or correlated) with Edgio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgio Inc has no effect on the direction of Remitly Global i.e., Remitly Global and Edgio go up and down completely randomly.
Pair Corralation between Remitly Global and Edgio
Given the investment horizon of 90 days Remitly Global is expected to generate 33.07 times less return on investment than Edgio. But when comparing it to its historical volatility, Remitly Global is 26.22 times less risky than Edgio. It trades about 0.06 of its potential returns per unit of risk. Edgio Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,480 in Edgio Inc on September 23, 2024 and sell it today you would lose (4,478) from holding Edgio Inc or give up 99.96% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.57% |
Values | Daily Returns |
Remitly Global vs. Edgio Inc
Performance |
Timeline |
Remitly Global |
Edgio Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Remitly Global and Edgio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Remitly Global and Edgio
The main advantage of trading using opposite Remitly Global and Edgio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remitly Global position performs unexpectedly, Edgio 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 Edgio will offset losses from the drop in Edgio's long position.Remitly Global vs. Lesaka Technologies | Remitly Global vs. CSG Systems International | Remitly Global vs. OneSpan | Remitly Global vs. Sangoma Technologies Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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