Correlation Between Alarum Technologies and Paysign

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

By analyzing existing cross correlation between Alarum Technologies and Paysign, you can compare the effects of market volatilities on Alarum Technologies and Paysign 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 Alarum Technologies with a short position of Paysign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarum Technologies and Paysign.

Diversification Opportunities for Alarum Technologies and Paysign

-0.06

Correlation Coefficient

Alarum Technologies  Paysign

Good diversification

The 3 months correlation between Alarum and Paysign is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Alarum Technologies and Paysign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysign and Alarum Technologies 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 Alarum Technologies are associated (or correlated) with Paysign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysign has no effect on the direction of Alarum Technologies i.e., Alarum Technologies and Paysign go up and down completely randomly.

Pair Corralation between Alarum Technologies and Paysign

Given the investment horizon of 90 days Alarum Technologies is expected to generate 2.6 times more return on investment than Paysign. However, Alarum Technologies is 2.6 times more volatile than Paysign. It trades about -0.15 of its potential returns per unit of risk. Paysign is currently generating about -0.47 per unit of risk. If you would invest  1,490  in Alarum Technologies on September 13, 2024 and sell it today you would lose (274.00) from holding Alarum Technologies or give up 18.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Alarum Technologies  vs.  Paysign

Alarum Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alarum Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Alarum Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Paysign

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paysign 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Alarum Technologies and Paysign

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

The idea behind Alarum Technologies and Paysign 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.