Correlation Between EPlus and Paltalk

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

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

Diversification Opportunities for EPlus and Paltalk

0.56

Correlation Coefficient

EPlus  Paltalk

Very weak diversification

The 3 months correlation between EPlus and Paltalk is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Paltalk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paltalk and EPlus 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 ePlus inc are associated (or correlated) with Paltalk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paltalk has no effect on the direction of EPlus i.e., EPlus and Paltalk go up and down completely randomly.

Pair Corralation between EPlus and Paltalk

Given the investment horizon of 90 days EPlus is expected to generate 1.92 times less return on investment than Paltalk. But when comparing it to its historical volatility, ePlus inc is 2.34 times less risky than Paltalk. It trades about 0.04 of its potential returns per unit of risk. Paltalk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  172.00  in Paltalk on September 12, 2024 and sell it today you would earn a total of  21.00  from holding Paltalk or generate 12.21% return on investment over 90 days.

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

ePlus inc  vs.  Paltalk

ePlus inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ePlus inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Paltalk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paltalk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EPlus and Paltalk

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

The idea behind ePlus inc and Paltalk 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.