Correlation Between Pagaya Technologies and Taoping

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

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

Diversification Opportunities for Pagaya Technologies and Taoping

-0.27

Correlation Coefficient

Pagaya Technologies  Taoping

Very good diversification

The 3 months correlation between Pagaya and Taoping is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pagaya Technologies and Taoping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taoping 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 Taoping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taoping has no effect on the direction of Pagaya Technologies i.e., Pagaya Technologies and Taoping go up and down completely randomly.

Pair Corralation between Pagaya Technologies and Taoping

Considering the 90-day investment horizon Pagaya Technologies is expected to generate 1.38 times more return on investment than Taoping. However, Pagaya Technologies is 1.38 times more volatile than Taoping. It trades about 0.06 of its potential returns per unit of risk. Taoping is currently generating about -0.17 per unit of risk. If you would invest  951.00  in Pagaya Technologies on December 28, 2024 and sell it today you would earn a total of  115.00  from holding Pagaya Technologies or generate 12.09% return on investment over 90 days.

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

Pagaya Technologies  vs.  Taoping

Pagaya Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pagaya Technologies are ranked lower than 4 (%) 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.

Taoping

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taoping has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Pagaya Technologies and Taoping

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

The idea behind Pagaya Technologies and Taoping 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 Commodity Directory module to find actively traded commodities issued by global exchanges.