Correlation Between Figs and Duolingo

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

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

Diversification Opportunities for Figs and Duolingo

-0.64

Correlation Coefficient

Figs  Duolingo

Excellent diversification

The 3 months correlation between Figs and Duolingo is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Duolingo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duolingo and Figs 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 Figs Inc are associated (or correlated) with Duolingo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duolingo has no effect on the direction of Figs i.e., Figs and Duolingo go up and down completely randomly.

Pair Corralation between Figs and Duolingo

Given the investment horizon of 90 days Figs Inc is expected to generate 0.9 times more return on investment than Duolingo. However, Figs Inc is 1.11 times less risky than Duolingo. It trades about 0.27 of its potential returns per unit of risk. Duolingo is currently generating about -0.07 per unit of risk. If you would invest  403.00  in Figs Inc on May 1, 2025 and sell it today you would earn a total of  264.00  from holding Figs Inc or generate 65.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Figs Inc  vs.  Duolingo

Figs Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Figs Inc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Figs unveiled solid returns over the last few months and may actually be approaching a breakup point.

Duolingo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duolingo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 Figs and Duolingo

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

The idea behind Figs Inc and Duolingo 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.