Correlation Between Expensify and Castle Biosciences

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

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

Diversification Opportunities for Expensify and Castle Biosciences

0.46

Correlation Coefficient

Expensify  Castle Biosciences

Very weak diversification

The 3 months correlation between Expensify and Castle is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Castle Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castle Biosciences and Expensify 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 Expensify are associated (or correlated) with Castle Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castle Biosciences has no effect on the direction of Expensify i.e., Expensify and Castle Biosciences go up and down completely randomly.

Pair Corralation between Expensify and Castle Biosciences

Given the investment horizon of 90 days Expensify is expected to under-perform the Castle Biosciences. In addition to that, Expensify is 1.57 times more volatile than Castle Biosciences. It trades about -0.12 of its total potential returns per unit of risk. Castle Biosciences is currently generating about -0.13 per unit of volatility. If you would invest  1,935  in Castle Biosciences on May 2, 2025 and sell it today you would lose (420.00) from holding Castle Biosciences or give up 21.71% of portfolio value over 90 days.

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

Expensify  vs.  Castle Biosciences

Expensify

Risk-Adjusted Performance

Very Weak

Over the last 90 days Expensify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Castle Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castle Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Expensify and Castle Biosciences

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

The idea behind Expensify and Castle Biosciences 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.