Correlation Between HIGHTECH PAYMENT and MED PAPER

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

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

Diversification Opportunities for HIGHTECH PAYMENT and MED PAPER

0.29

Correlation Coefficient

HIGHTECH PAYMENT  MED PAPER

Modest diversification

The 3 months correlation between HIGHTECH and MED is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding HIGHTECH PAYMENT SYSTEMS and MED PAPER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MED PAPER and HIGHTECH PAYMENT 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 HIGHTECH PAYMENT SYSTEMS are associated (or correlated) with MED PAPER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MED PAPER has no effect on the direction of HIGHTECH PAYMENT i.e., HIGHTECH PAYMENT and MED PAPER go up and down completely randomly.

Pair Corralation between HIGHTECH PAYMENT and MED PAPER

Assuming the 90 days trading horizon HIGHTECH PAYMENT is expected to generate 1.91 times less return on investment than MED PAPER. But when comparing it to its historical volatility, HIGHTECH PAYMENT SYSTEMS is 1.32 times less risky than MED PAPER. It trades about 0.06 of its potential returns per unit of risk. MED PAPER is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,063  in MED PAPER on December 29, 2024 and sell it today you would earn a total of  286.00  from holding MED PAPER or generate 13.86% return on investment over 90 days.

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

HIGHTECH PAYMENT SYSTEMS  vs.  MED PAPER

HIGHTECH PAYMENT SYSTEMS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HIGHTECH PAYMENT SYSTEMS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, HIGHTECH PAYMENT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MED PAPER

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MED PAPER are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, MED PAPER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HIGHTECH PAYMENT and MED PAPER

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

The idea behind HIGHTECH PAYMENT SYSTEMS and MED PAPER 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.