Correlation Between Expensify and Olo

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

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

Diversification Opportunities for Expensify and Olo

0.38

Correlation Coefficient

Expensify  Olo

Weak diversification

The 3 months correlation between Expensify and Olo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Olo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olo Inc 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 Olo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olo Inc has no effect on the direction of Expensify i.e., Expensify and Olo go up and down completely randomly.

Pair Corralation between Expensify and Olo

Given the investment horizon of 90 days Expensify is expected to generate 1.37 times more return on investment than Olo. However, Expensify is 1.37 times more volatile than Olo Inc. It trades about 0.01 of its potential returns per unit of risk. Olo Inc is currently generating about -0.03 per unit of risk. If you would invest  326.00  in Expensify on November 28, 2024 and sell it today you would lose (6.50) from holding Expensify or give up 1.99% of portfolio value over 90 days.

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

Expensify  vs.  Olo Inc

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.

Olo Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Expensify and Olo

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

The idea behind Expensify and Olo Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..