Correlation Between Fair Isaac and PAX Global

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

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

Diversification Opportunities for Fair Isaac and PAX Global

0.05

Correlation Coefficient

Fair Isaac  PAX Global

Significant diversification

The 3 months correlation between Fair and PAX is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac Corp and PAX Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAX Global Technology and Fair Isaac 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 Fair Isaac Corp are associated (or correlated) with PAX Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAX Global Technology has no effect on the direction of Fair Isaac i.e., Fair Isaac and PAX Global go up and down completely randomly.

Pair Corralation between Fair Isaac and PAX Global

Assuming the 90 days trading horizon Fair Isaac Corp is expected to under-perform the PAX Global. But the stock apears to be less risky and, when comparing its historical volatility, Fair Isaac Corp is 2.77 times less risky than PAX Global. The stock trades about -0.19 of its potential returns per unit of risk. The PAX Global Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  55.00  in PAX Global Technology on October 11, 2024 and sell it today you would earn a total of  5.00  from holding PAX Global Technology or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.44%
Values	Daily Returns

Fair Isaac Corp  vs.  PAX Global Technology

Fair Isaac Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fair Isaac is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

PAX Global Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PAX Global Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, PAX Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fair Isaac and PAX Global

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

The idea behind Fair Isaac Corp and PAX Global Technology 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.