Correlation Between Eventbrite and Aspen Technology

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

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

Diversification Opportunities for Eventbrite and Aspen Technology

-0.81

Correlation Coefficient

Eventbrite  Aspen Technology

Pay attention - limited upside

The 3 months correlation between Eventbrite and Aspen is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Eventbrite Class A and Aspen Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Technology and Eventbrite 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 Eventbrite Class A are associated (or correlated) with Aspen Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Technology has no effect on the direction of Eventbrite i.e., Eventbrite and Aspen Technology go up and down completely randomly.

Pair Corralation between Eventbrite and Aspen Technology

Allowing for the 90-day total investment horizon Eventbrite Class A is expected to under-perform the Aspen Technology. In addition to that, Eventbrite is 1.58 times more volatile than Aspen Technology. It trades about -0.02 of its total potential returns per unit of risk. Aspen Technology is currently generating about 0.01 per unit of volatility. If you would invest  24,248  in Aspen Technology on June 22, 2024 and sell it today you would lose (322.00) from holding Aspen Technology or give up 1.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Eventbrite Class A  vs.  Aspen Technology

Eventbrite Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eventbrite Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Aspen Technology

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Eventbrite and Aspen Technology

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

The idea behind Eventbrite Class A and Aspen 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.

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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.