Correlation Between SPS Commerce and Dave

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

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

Diversification Opportunities for SPS Commerce and Dave

0.26

Correlation Coefficient

SPS Commerce  Dave

Modest diversification

The 3 months correlation between SPS and Dave is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SPS Commerce and Dave Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Inc 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 Dave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Inc has no effect on the direction of SPS Commerce i.e., SPS Commerce and Dave go up and down completely randomly.

Pair Corralation between SPS Commerce and Dave

Given the investment horizon of 90 days SPS Commerce is expected to under-perform the Dave. But the stock apears to be less risky and, when comparing its historical volatility, SPS Commerce is 1.37 times less risky than Dave. The stock trades about -0.09 of its potential returns per unit of risk. The Dave Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  22,780  in Dave Inc on September 18, 2025 and sell it today you would lose (2,887) from holding Dave Inc or give up 12.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SPS Commerce  vs.  Dave Inc

SPS Commerce

Risk-Adjusted Performance

Weakest

Over the last 90 days SPS Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2026. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Dave Inc

Risk-Adjusted Performance

Weakest

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

Pair Trading with SPS Commerce and Dave

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

The idea behind SPS Commerce and Dave Inc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.