Correlation Between Riskified and Semrush Holdings

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

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

Diversification Opportunities for Riskified and Semrush Holdings

0.84

Correlation Coefficient

Riskified  Semrush Holdings

Very poor diversification

The 3 months correlation between Riskified and Semrush is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Riskified and Semrush Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semrush Holdings 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 Semrush Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semrush Holdings has no effect on the direction of Riskified i.e., Riskified and Semrush Holdings go up and down completely randomly.

Pair Corralation between Riskified and Semrush Holdings

Given the investment horizon of 90 days Riskified is expected to generate 0.51 times more return on investment than Semrush Holdings. However, Riskified is 1.96 times less risky than Semrush Holdings. It trades about -0.01 of its potential returns per unit of risk. Semrush Holdings is currently generating about -0.06 per unit of risk. If you would invest  474.00  in Riskified on December 30, 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	Strong
Accuracy	100.0%
Values	Daily Returns

Riskified  vs.  Semrush Holdings

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.

Semrush Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semrush Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Riskified and Semrush Holdings

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

The idea behind Riskified and Semrush Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.