Correlation Between Expensify and Dave Warrants

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

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

Diversification Opportunities for Expensify and Dave Warrants

0.31

Correlation Coefficient

Expensify  Dave Warrants

Weak diversification

The 3 months correlation between Expensify and Dave is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Dave Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Warrants and Expensify 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 Expensify are associated (or correlated) with Dave Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Warrants has no effect on the direction of Expensify i.e., Expensify and Dave Warrants go up and down completely randomly.

Pair Corralation between Expensify and Dave Warrants

Given the investment horizon of 90 days Expensify is expected to generate 9.57 times less return on investment than Dave Warrants. But when comparing it to its historical volatility, Expensify is 2.5 times less risky than Dave Warrants. It trades about 0.04 of its potential returns per unit of risk. Dave Warrants is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Dave Warrants on December 4, 2024 and sell it today you would earn a total of  14.00  from holding Dave Warrants or generate 100.0% return on investment over 90 days.

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

Expensify  vs.  Dave Warrants

Expensify

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Expensify are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Expensify may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dave Warrants

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Warrants are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Dave Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expensify and Dave Warrants

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

The idea behind Expensify and Dave Warrants 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.