Correlation Between Olo and Riskified

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

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

Diversification Opportunities for Olo and Riskified

0.55

Correlation Coefficient

Olo  Riskified

Very weak diversification

The 3 months correlation between Olo and Riskified is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Olo Inc and Riskified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riskified and Olo 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 Olo Inc are associated (or correlated) with Riskified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riskified has no effect on the direction of Olo i.e., Olo and Riskified go up and down completely randomly.

Pair Corralation between Olo and Riskified

Considering the 90-day investment horizon Olo Inc is expected to generate 1.32 times more return on investment than Riskified. However, Olo is 1.32 times more volatile than Riskified. It trades about 0.18 of its potential returns per unit of risk. Riskified is currently generating about -0.02 per unit of risk. If you would invest  717.00  in Olo Inc on September 23, 2024 and sell it today you would earn a total of  66.00  from holding Olo Inc or generate 9.21% return on investment over 90 days.

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

Olo Inc  vs.  Riskified

Olo Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Olo Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Olo displayed solid returns over the last few months and may actually be approaching a breakup point.

Riskified

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Riskified has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Riskified is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Olo and Riskified

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

The idea behind Olo Inc and Riskified 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.