Correlation Between Amplitude and Sprinklr

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

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

Diversification Opportunities for Amplitude and Sprinklr

0.35

Correlation Coefficient

Amplitude  Sprinklr

Weak diversification

The 3 months correlation between Amplitude and Sprinklr is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amplitude and Sprinklr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprinklr and Amplitude 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 Amplitude are associated (or correlated) with Sprinklr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprinklr has no effect on the direction of Amplitude i.e., Amplitude and Sprinklr go up and down completely randomly.

Pair Corralation between Amplitude and Sprinklr

Given the investment horizon of 90 days Amplitude is expected to under-perform the Sprinklr. But the stock apears to be less risky and, when comparing its historical volatility, Amplitude is 1.08 times less risky than Sprinklr. The stock trades about 0.0 of its potential returns per unit of risk. The Sprinklr is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,196  in Sprinklr on January 25, 2024 and sell it today you would lose (13.00) from holding Sprinklr or give up 1.09% of portfolio value over 90 days.

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

Amplitude  vs.  Sprinklr

Amplitude

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplitude has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sprinklr

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Amplitude and Sprinklr

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

The idea behind Amplitude and Sprinklr 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.