Correlation Between Riskified and Olo

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

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

Diversification Opportunities for Riskified and Olo

0.24

Correlation Coefficient

Riskified  Olo

Modest diversification

The 3 months correlation between Riskified and Olo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Riskified and Olo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olo Inc and Riskified 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 Riskified 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 Riskified i.e., Riskified and Olo go up and down completely randomly.

Pair Corralation between Riskified and Olo

Given the investment horizon of 90 days Riskified is expected to generate 0.91 times more return on investment than Olo. However, Riskified is 1.09 times less risky than Olo. It trades about -0.01 of its potential returns per unit of risk. Olo Inc is currently generating about -0.11 per unit of risk. If you would invest  474.00  in Riskified on December 29, 2024 and sell it today you would lose (14.00) from holding Riskified or give up 2.95% of portfolio value over 90 days.

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

Riskified  vs.  Olo Inc

Riskified

Risk-Adjusted Performance

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.

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.

Pair Trading with Riskified and Olo

The main advantage of trading using opposite Riskified and Olo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riskified 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 Riskified 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..