Correlation Between Alkami Technology and Workiva

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

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

Diversification Opportunities for Alkami Technology and Workiva

0.81

Correlation Coefficient

Alkami Technology  Workiva

Very poor diversification

The 3 months correlation between Alkami and Workiva is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Alkami Technology and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva and Alkami Technology 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 Alkami Technology are associated (or correlated) with Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of Alkami Technology i.e., Alkami Technology and Workiva go up and down completely randomly.

Pair Corralation between Alkami Technology and Workiva

Given the investment horizon of 90 days Alkami Technology is expected to generate 0.93 times more return on investment than Workiva. However, Alkami Technology is 1.07 times less risky than Workiva. It trades about -0.18 of its potential returns per unit of risk. Workiva is currently generating about -0.17 per unit of risk. If you would invest  3,625  in Alkami Technology on December 28, 2024 and sell it today you would lose (984.00) from holding Alkami Technology or give up 27.14% of portfolio value over 90 days.

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

Alkami Technology  vs.  Workiva

Alkami Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alkami Technology 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Workiva

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workiva 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 forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alkami Technology and Workiva

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

The idea behind Alkami Technology and Workiva 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.