Correlation Between Walkme and Riskified

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

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

Diversification Opportunities for Walkme and Riskified

-0.03

Correlation Coefficient

Walkme  Riskified

Good diversification

The 3 months correlation between Walkme and Riskified is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Walkme and Riskified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riskified and Walkme 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 Walkme are associated (or correlated) with Riskified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riskified has no effect on the direction of Walkme i.e., Walkme and Riskified go up and down completely randomly.

Pair Corralation between Walkme and Riskified

Given the investment horizon of 90 days Walkme is expected to generate 1.37 times less return on investment than Riskified. But when comparing it to its historical volatility, Walkme is 10.51 times less risky than Riskified. It trades about 0.35 of its potential returns per unit of risk. Riskified is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  476.00  in Riskified on June 21, 2024 and sell it today you would earn a total of  7.00  from holding Riskified or generate 1.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.82%
Values	Daily Returns

Walkme  vs.  Riskified

Walkme

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walkme are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Walkme is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Riskified

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Riskified has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in October 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Walkme and Riskified

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

The idea behind Walkme and Riskified 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.