Correlation Between Sapiens International and Expensify

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

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

Diversification Opportunities for Sapiens International and Expensify

-0.89

Correlation Coefficient

Sapiens International  Expensify

Pay attention - limited upside

The 3 months correlation between Sapiens and Expensify is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify and Sapiens International 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 Sapiens International 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 Sapiens International i.e., Sapiens International and Expensify go up and down completely randomly.

Pair Corralation between Sapiens International and Expensify

Given the investment horizon of 90 days Sapiens International is expected to under-perform the Expensify. But the stock apears to be less risky and, when comparing its historical volatility, Sapiens International is 1.28 times less risky than Expensify. The stock trades about -0.08 of its potential returns per unit of risk. The Expensify is currently generating about 0.2 of returns per unit of risk over similar time horizon. 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 Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sapiens International  vs.  Expensify

Sapiens International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sapiens International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with Sapiens International and Expensify

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

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.