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 Ltd 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 Ltd 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 Ltd 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  23.00  in Pagaya Technologies Ltd on December 28, 2024 and sell it today you would earn a total of  0.01  from holding Pagaya Technologies Ltd or generate 0.04% return on investment over 90 days.

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

Pagaya Technologies Ltd  vs.  QualTek Services

Pagaya Technologies

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pagaya Technologies Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Pagaya Technologies is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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. Despite quite persistent technical and fundamental indicators, QualTek Services is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional 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 Ltd 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .