Correlation Between Five9 and AudioCodes

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Can any of the company-specific risk be diversified away by investing in both Five9 and AudioCodes 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 Five9 and AudioCodes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five9 Inc and AudioCodes, you can compare the effects of market volatilities on Five9 and AudioCodes 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 Five9 with a short position of AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five9 and AudioCodes.

Diversification Opportunities for Five9 and AudioCodes

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Five9 and AudioCodes is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Five9 Inc and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Five9 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 Five9 Inc are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Five9 i.e., Five9 and AudioCodes go up and down completely randomly.

Pair Corralation between Five9 and AudioCodes

Given the investment horizon of 90 days Five9 Inc is expected to under-perform the AudioCodes. In addition to that, Five9 is 1.56 times more volatile than AudioCodes. It trades about -0.1 of its total potential returns per unit of risk. AudioCodes is currently generating about -0.09 per unit of volatility. If you would invest  1,029  in AudioCodes on July 27, 2025 and sell it today you would lose (124.00) from holding AudioCodes or give up 12.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Five9 Inc  vs.  AudioCodes

 Performance 
       Timeline  
Five9 Inc 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Five9 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 Stock's basic indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
AudioCodes 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days AudioCodes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Five9 and AudioCodes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Five9 and AudioCodes

The main advantage of trading using opposite Five9 and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five9 position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' long position.
The idea behind Five9 Inc and AudioCodes 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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