Correlation Between Expensify and LivePerson

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

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

Diversification Opportunities for Expensify and LivePerson

0.09

Correlation Coefficient

Expensify  LivePerson

Significant diversification

The 3 months correlation between Expensify and LivePerson is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and LivePerson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivePerson 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 LivePerson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivePerson has no effect on the direction of Expensify i.e., Expensify and LivePerson go up and down completely randomly.

Pair Corralation between Expensify and LivePerson

Given the investment horizon of 90 days Expensify is expected to under-perform the LivePerson. But the stock apears to be less risky and, when comparing its historical volatility, Expensify is 1.9 times less risky than LivePerson. The stock trades about -0.01 of its potential returns per unit of risk. The LivePerson is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  89.00  in LivePerson on December 25, 2024 and sell it today you would earn a total of  4.00  from holding LivePerson or generate 4.49% return on investment over 90 days.

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

Expensify  vs.  LivePerson

Expensify

Risk-Adjusted Performance

Very Weak

Over the last 90 days Expensify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Expensify is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

LivePerson

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LivePerson are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, LivePerson displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expensify and LivePerson

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

The idea behind Expensify and LivePerson 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.