Correlation Between Expensify and PDF Solutions

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

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

Diversification Opportunities for Expensify and PDF Solutions

0.28

Correlation Coefficient

Expensify  PDF Solutions

Modest diversification

The 3 months correlation between Expensify and PDF is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and PDF Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDF Solutions 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 PDF Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDF Solutions has no effect on the direction of Expensify i.e., Expensify and PDF Solutions go up and down completely randomly.

Pair Corralation between Expensify and PDF Solutions

Given the investment horizon of 90 days Expensify is expected to generate 1.12 times more return on investment than PDF Solutions. However, Expensify is 1.12 times more volatile than PDF Solutions. It trades about -0.02 of its potential returns per unit of risk. PDF Solutions is currently generating about -0.13 per unit of risk. If you would invest  348.00  in Expensify on December 28, 2024 and sell it today you would lose (37.00) from holding Expensify or give up 10.63% 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.  PDF Solutions

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.

PDF Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days PDF Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators 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.

Pair Trading with Expensify and PDF Solutions

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

The idea behind Expensify and PDF Solutions 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..