Correlation Between Beyond Commerce and Global Payout

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

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

Diversification Opportunities for Beyond Commerce and Global Payout

0.17

Correlation Coefficient

Beyond Commerce  Global Payout

Average diversification

The 3 months correlation between Beyond and Global is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Commerce and Global Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payout and Beyond 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 Beyond Commerce are associated (or correlated) with Global Payout. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payout has no effect on the direction of Beyond Commerce i.e., Beyond Commerce and Global Payout go up and down completely randomly.

Pair Corralation between Beyond Commerce and Global Payout

Given the investment horizon of 90 days Beyond Commerce is expected to generate 3.1 times more return on investment than Global Payout. However, Beyond Commerce is 3.1 times more volatile than Global Payout. It trades about 0.19 of its potential returns per unit of risk. Global Payout is currently generating about -0.02 per unit of risk. If you would invest  0.01  in Beyond Commerce on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Beyond Commerce or generate 0.0% return on investment over 90 days.

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

Beyond Commerce  vs.  Global Payout

Beyond Commerce

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Commerce are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Beyond Commerce exhibited solid returns over the last few months and may actually be approaching a breakup point.

Global Payout

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Payout has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Beyond Commerce and Global Payout

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

The idea behind Beyond Commerce and Global Payout 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.