Correlation Between Expensify and Model N

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

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

Diversification Opportunities for Expensify and Model N

0.0

Correlation Coefficient

Expensify  Model N

Pay attention - limited upside

The 3 months correlation between Expensify and Model is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N 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 Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Expensify i.e., Expensify and Model N go up and down completely randomly.

Pair Corralation between Expensify and Model N

If you would invest (100.00) in Model N on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Model N or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Expensify  vs.  Model N

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.

Model N

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Expensify and Model N

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

The idea behind Expensify and Model N 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.