Correlation Between Edgio and StoneCo

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

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

Diversification Opportunities for Edgio and StoneCo

0.0

Correlation Coefficient

Edgio  StoneCo

Pay attention - limited upside

The 3 months correlation between Edgio and StoneCo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edgio Inc and StoneCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StoneCo and Edgio 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 Edgio Inc are associated (or correlated) with StoneCo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StoneCo has no effect on the direction of Edgio i.e., Edgio and StoneCo go up and down completely randomly.

Pair Corralation between Edgio and StoneCo

If you would invest (100.00) in Edgio Inc on May 6, 2025 and sell it today you would earn a total of  100.00  from holding Edgio Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Edgio Inc  vs.  StoneCo

Edgio Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edgio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Edgio is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

StoneCo

Risk-Adjusted Performance

Very Weak

Over the last 90 days StoneCo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, StoneCo is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Edgio and StoneCo

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

The idea behind Edgio Inc and StoneCo 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.