Correlation Between SPS Commerce and Tenable Holdings
Can any of the company-specific risk be diversified away by investing in both SPS Commerce and Tenable 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 SPS Commerce and Tenable Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPS Commerce and Tenable Holdings, you can compare the effects of market volatilities on SPS Commerce and Tenable 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 SPS Commerce with a short position of Tenable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPS Commerce and Tenable Holdings.
Diversification Opportunities for SPS Commerce and Tenable Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPS and Tenable is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SPS Commerce and Tenable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenable Holdings and SPS Commerce 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 SPS Commerce are associated (or correlated) with Tenable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenable Holdings has no effect on the direction of SPS Commerce i.e., SPS Commerce and Tenable Holdings go up and down completely randomly.
Pair Corralation between SPS Commerce and Tenable Holdings
Given the investment horizon of 90 days SPS Commerce is expected to generate 1.05 times more return on investment than Tenable Holdings. However, SPS Commerce is 1.05 times more volatile than Tenable Holdings. It trades about 0.11 of its potential returns per unit of risk. Tenable Holdings is currently generating about 0.07 per unit of risk. If you would invest 12,161 in SPS Commerce on April 8, 2025 and sell it today you would earn a total of 1,975 from holding SPS Commerce or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPS Commerce vs. Tenable Holdings
Performance |
| Timeline |
| SPS Commerce |
| Tenable Holdings |
SPS Commerce and Tenable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPS Commerce and Tenable Holdings
The main advantage of trading using opposite SPS Commerce and Tenable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPS Commerce position performs unexpectedly, Tenable 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 Tenable Holdings will offset losses from the drop in Tenable Holdings' long position.| SPS Commerce vs. GE Vernova LLC | SPS Commerce vs. Southwest Gas Holdings | SPS Commerce vs. Alliant Energy Corp | SPS Commerce vs. American Electric Power |
| Tenable Holdings vs. Harmony Gold Mining | Tenable Holdings vs. Monster Beverage Corp | Tenable Holdings vs. Summa Silver Corp | Tenable Holdings vs. Ambev SA ADR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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