Correlation Between Mogo and Payfare

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

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

Diversification Opportunities for Mogo and Payfare

-0.72

Correlation Coefficient

Mogo  Payfare

Pay attention - limited upside

The 3 months correlation between Mogo and Payfare is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mogo Inc and Payfare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payfare and Mogo 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 Mogo Inc are associated (or correlated) with Payfare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payfare has no effect on the direction of Mogo i.e., Mogo and Payfare go up and down completely randomly.

Pair Corralation between Mogo and Payfare

Assuming the 90 days trading horizon Mogo Inc is expected to under-perform the Payfare. In addition to that, Mogo is 1.84 times more volatile than Payfare. It trades about -0.44 of its total potential returns per unit of risk. Payfare is currently generating about 0.1 per unit of volatility. If you would invest  391.00  in Payfare on December 4, 2024 and sell it today you would earn a total of  9.00  from holding Payfare or generate 2.3% return on investment over 90 days.

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

Mogo Inc  vs.  Payfare

Mogo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mogo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Payfare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Payfare are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Payfare displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mogo and Payfare

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

The idea behind Mogo Inc and Payfare 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.