When business partnerships extend beyond handshake agreements to create deep interdependence, their stock prices often move in tandem—sometimes with remarkable accuracy.
The Dance of Interdependent Stocks
In the realm of public markets, few relationships are as telling as those between strategic business partners with intertwined destinies. While diversification is a key focus for investors to minimize risk, some stocks are so consistently interlinked that they become a leveraged bet on each other’s success. The relationship between Shopify (SHOP), a giant in e-commerce, and Klaviyo (KVYO), a leader in marketing automation, presents a compelling case of how profound business partnerships result in directly correlated stock movements.
Since Klaviyo’s initial public offering in September 2023, the two stocks have demonstrated a correlation coefficient estimated between 0.6 and 0.7—a robust relationship that leads savvy investors to treat them as nearly a single position when constructing portfolios.
