Correlation Between Pagaya Technologies and QualTek Services

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

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

Diversification Opportunities for Pagaya Technologies and QualTek Services

0.0

Correlation Coefficient

Pagaya Technologies  QualTek Services

Pay attention - limited upside

The 3 months correlation between Pagaya and QualTek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pagaya Technologies and QualTek Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QualTek Services and Pagaya Technologies 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 Pagaya Technologies are associated (or correlated) with QualTek Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QualTek Services has no effect on the direction of Pagaya Technologies i.e., Pagaya Technologies and QualTek Services go up and down completely randomly.

Pair Corralation between Pagaya Technologies and QualTek Services

If you would invest  963.00  in Pagaya Technologies on December 3, 2024 and sell it today you would earn a total of  320.00  from holding Pagaya Technologies or generate 33.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pagaya Technologies  vs.  QualTek Services

Pagaya Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pagaya Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pagaya Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

QualTek Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days QualTek Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, QualTek Services is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Pagaya Technologies and QualTek Services

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

The idea behind Pagaya Technologies and QualTek Services 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.