Correlation Between ON24 and Latch

Can any of the company-specific risk be diversified away by investing in both ON24 and Latch 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 ON24 and Latch into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ON24 Inc and Latch Inc, you can compare the effects of market volatilities on ON24 and Latch 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 ON24 with a short position of Latch. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON24 and Latch.

Diversification Opportunities for ON24 and Latch

0.76

Correlation Coefficient

ON24  Latch

Poor diversification

The 3 months correlation between ON24 and Latch is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ON24 Inc and Latch Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latch Inc and ON24 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 ON24 Inc are associated (or correlated) with Latch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latch Inc has no effect on the direction of ON24 i.e., ON24 and Latch go up and down completely randomly.

Pair Corralation between ON24 and Latch

If you would invest  172.00  in Latch Inc on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Latch Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

ON24 Inc  vs.  Latch Inc

ON24 Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ON24 Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, ON24 reported solid returns over the last few months and may actually be approaching a breakup point.

Latch Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Latch Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Latch is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ON24 and Latch

The main advantage of trading using opposite ON24 and Latch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON24 position performs unexpectedly, Latch 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 Latch will offset losses from the drop in Latch's long position.

The idea behind ON24 Inc and Latch 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.