Correlation Between Alight and EverCommerce

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

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

Diversification Opportunities for Alight and EverCommerce

0.66

Correlation Coefficient

Alight  EverCommerce

Poor diversification

The 3 months correlation between Alight and EverCommerce is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alight Inc and EverCommerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EverCommerce and Alight 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 Alight Inc are associated (or correlated) with EverCommerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EverCommerce has no effect on the direction of Alight i.e., Alight and EverCommerce go up and down completely randomly.

Pair Corralation between Alight and EverCommerce

Given the investment horizon of 90 days Alight is expected to generate 1.58 times less return on investment than EverCommerce. But when comparing it to its historical volatility, Alight Inc is 1.03 times less risky than EverCommerce. It trades about 0.08 of its potential returns per unit of risk. EverCommerce is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  976.00  in EverCommerce on April 30, 2025 and sell it today you would earn a total of  154.00  from holding EverCommerce or generate 15.78% return on investment over 90 days.

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

Alight Inc  vs.  EverCommerce

Alight Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alight Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Alight may actually be approaching a critical reversion point that can send shares even higher in August 2025.

EverCommerce

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EverCommerce are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, EverCommerce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alight and EverCommerce

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

The idea behind Alight Inc and EverCommerce 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.