Correlation Between Pagaya Technologies and Hashicorp

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

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

Diversification Opportunities for Pagaya Technologies and Hashicorp

-0.32

Correlation Coefficient

Pagaya Technologies  Hashicorp

Very good diversification

The 3 months correlation between Pagaya and Hashicorp is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pagaya Technologies Ltd and Hashicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hashicorp 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 Ltd are associated (or correlated) with Hashicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hashicorp has no effect on the direction of Pagaya Technologies i.e., Pagaya Technologies and Hashicorp go up and down completely randomly.

Pair Corralation between Pagaya Technologies and Hashicorp

Assuming the 90 days horizon Pagaya Technologies Ltd is expected to under-perform the Hashicorp. In addition to that, Pagaya Technologies is 55.36 times more volatile than Hashicorp. It trades about -0.2 of its total potential returns per unit of risk. Hashicorp is currently generating about 0.2 per unit of volatility. If you would invest  3,382  in Hashicorp on September 21, 2024 and sell it today you would earn a total of  40.00  from holding Hashicorp or generate 1.18% return on investment over 90 days.

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

Pagaya Technologies Ltd  vs.  Hashicorp

Pagaya Technologies

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Pagaya Technologies Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Hashicorp

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hashicorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Hashicorp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pagaya Technologies and Hashicorp

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

The idea behind Pagaya Technologies Ltd and Hashicorp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..