Correlation Between Freshworks and Expensify
Can any of the company-specific risk be diversified away by investing in both Freshworks and Expensify 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 Freshworks and Expensify into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freshworks and Expensify, you can compare the effects of market volatilities on Freshworks and Expensify 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 Freshworks with a short position of Expensify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freshworks and Expensify.
Diversification Opportunities for Freshworks and Expensify
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Freshworks and Expensify is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Freshworks and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify and Freshworks 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 Freshworks are associated (or correlated) with Expensify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expensify has no effect on the direction of Freshworks i.e., Freshworks and Expensify go up and down completely randomly.
Pair Corralation between Freshworks and Expensify
Given the investment horizon of 90 days Freshworks is expected to under-perform the Expensify. But the stock apears to be less risky and, when comparing its historical volatility, Freshworks is 1.52 times less risky than Expensify. The stock trades about -0.13 of its potential returns per unit of risk. The Expensify is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 235.00 in Expensify on June 8, 2025 and sell it today you would lose (43.00) from holding Expensify or give up 18.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freshworks vs. Expensify
Performance |
| Timeline |
| Freshworks |
| Expensify |
Freshworks and Expensify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freshworks and Expensify
The main advantage of trading using opposite Freshworks and Expensify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freshworks position performs unexpectedly, Expensify 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 Expensify will offset losses from the drop in Expensify's long position.The idea behind Freshworks and Expensify 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.| Expensify vs. Braze Inc | Expensify vs. Freshworks | Expensify vs. Clearwater Analytics Holdings | Expensify vs. CS Disco LLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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