Correlation Between AvidXchange Holdings and Secureworks Corp

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

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

Diversification Opportunities for AvidXchange Holdings and Secureworks Corp

0.51

Correlation Coefficient

AvidXchange Holdings  Secureworks Corp

Very weak diversification

The 3 months correlation between AvidXchange and Secureworks is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AvidXchange Holdings and Secureworks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secureworks Corp and AvidXchange Holdings 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 AvidXchange Holdings are associated (or correlated) with Secureworks Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secureworks Corp has no effect on the direction of AvidXchange Holdings i.e., AvidXchange Holdings and Secureworks Corp go up and down completely randomly.

Pair Corralation between AvidXchange Holdings and Secureworks Corp

If you would invest  823.00  in AvidXchange Holdings on May 4, 2025 and sell it today you would earn a total of  163.00  from holding AvidXchange Holdings or generate 19.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

AvidXchange Holdings  vs.  Secureworks Corp

AvidXchange Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AvidXchange Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, AvidXchange Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Secureworks Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Secureworks Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Secureworks Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AvidXchange Holdings and Secureworks Corp

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

The idea behind AvidXchange Holdings and Secureworks Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.