Correlation Between Walkme and SimilarWeb

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

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

Diversification Opportunities for Walkme and SimilarWeb

0.08

Correlation Coefficient

Walkme  SimilarWeb

Significant diversification

The 3 months correlation between Walkme and SimilarWeb is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Walkme and SimilarWeb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SimilarWeb and Walkme 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 Walkme 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 Walkme i.e., Walkme and SimilarWeb go up and down completely randomly.

Pair Corralation between Walkme and SimilarWeb

Given the investment horizon of 90 days Walkme is expected to generate 5.8 times less return on investment than SimilarWeb. But when comparing it to its historical volatility, Walkme is 16.67 times less risky than SimilarWeb. It trades about 0.49 of its potential returns per unit of risk. SimilarWeb is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  911.00  in SimilarWeb on September 5, 2024 and sell it today you would earn a total of  332.00  from holding SimilarWeb or generate 36.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	10.94%
Values	Daily Returns

Walkme  vs.  SimilarWeb

Walkme

Risk-Adjusted Performance

0 of 100

Very Strong

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

SimilarWeb

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SimilarWeb are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SimilarWeb sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walkme and SimilarWeb

The main advantage of trading using opposite Walkme and SimilarWeb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walkme 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 Walkme 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.