Correlation Between Olo and SimilarWeb

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

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

Diversification Opportunities for Olo and SimilarWeb

0.79

Correlation Coefficient

Olo  SimilarWeb

Poor diversification

The 3 months correlation between Olo and SimilarWeb is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Olo Inc and SimilarWeb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SimilarWeb 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 SimilarWeb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SimilarWeb has no effect on the direction of Olo i.e., Olo and SimilarWeb go up and down completely randomly.

Pair Corralation between Olo and SimilarWeb

Considering the 90-day investment horizon Olo Inc is expected to generate 0.51 times more return on investment than SimilarWeb. However, Olo Inc is 1.98 times less risky than SimilarWeb. It trades about -0.11 of its potential returns per unit of risk. SimilarWeb is currently generating about -0.15 per unit of risk. If you would invest  770.00  in Olo Inc on December 29, 2024 and sell it today you would lose (128.00) from holding Olo Inc or give up 16.62% of portfolio value over 90 days.

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

Olo Inc  vs.  SimilarWeb

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 weak performance in the last few months, the Etf's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

SimilarWeb

Risk-Adjusted Performance

Very Weak

Over the last 90 days SimilarWeb has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Olo and SimilarWeb

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

The idea behind Olo Inc and SimilarWeb 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.