Correlation Between Isras Investment and Payment Financial

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

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

Diversification Opportunities for Isras Investment and Payment Financial

-0.02

Correlation Coefficient

Isras Investment  Payment Financial

Good diversification

The 3 months correlation between Isras and Payment is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Isras Investment and Payment Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payment Financial and Isras Investment 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 Isras Investment are associated (or correlated) with Payment Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payment Financial has no effect on the direction of Isras Investment i.e., Isras Investment and Payment Financial go up and down completely randomly.

Pair Corralation between Isras Investment and Payment Financial

Assuming the 90 days trading horizon Isras Investment is expected to under-perform the Payment Financial. But the stock apears to be less risky and, when comparing its historical volatility, Isras Investment is 2.13 times less risky than Payment Financial. The stock trades about -0.13 of its potential returns per unit of risk. The Payment Financial Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  31,785  in Payment Financial Technologies on December 22, 2024 and sell it today you would earn a total of  7,015  from holding Payment Financial Technologies or generate 22.07% return on investment over 90 days.

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

Isras Investment  vs.  Payment Financial Technologies

Isras Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Isras Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Payment Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Payment Financial Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Payment Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Isras Investment and Payment Financial

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

The idea behind Isras Investment and Payment Financial Technologies 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.