Correlation Between Alfi and Akamai Technologies
Can any of the company-specific risk be diversified away by investing in both Alfi and Akamai Technologies 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 Alfi and Akamai Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfi Inc and Akamai Technologies, you can compare the effects of market volatilities on Alfi and Akamai Technologies 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 Alfi with a short position of Akamai Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfi and Akamai Technologies.
Diversification Opportunities for Alfi and Akamai Technologies
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alfi and Akamai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alfi Inc and Akamai Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies and Alfi 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 Alfi Inc are associated (or correlated) with Akamai Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies has no effect on the direction of Alfi i.e., Alfi and Akamai Technologies go up and down completely randomly.
Pair Corralation between Alfi and Akamai Technologies
If you would invest 1.47 in Alfi Inc on February 4, 2024 and sell it today you would earn a total of 0.00 from holding Alfi Inc or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 4.55% |
Values | Daily Returns |
Alfi Inc vs. Akamai Technologies
Performance |
Timeline |
Alfi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Akamai Technologies |
Alfi and Akamai Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alfi and Akamai Technologies
The main advantage of trading using opposite Alfi and Akamai Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfi position performs unexpectedly, Akamai Technologies 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 Akamai Technologies will offset losses from the drop in Akamai Technologies' long position.Alfi vs. Cadence Design Systems | Alfi vs. Boston Properties | Alfi vs. Addus HomeCare | Alfi vs. Smith Douglas Homes |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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