Correlation Between Paysafe and Allient

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

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

Diversification Opportunities for Paysafe and Allient

-0.62

Correlation Coefficient

Paysafe  Allient

Excellent diversification

The 3 months correlation between Paysafe and Allient is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Paysafe 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 Paysafe are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Paysafe i.e., Paysafe and Allient go up and down completely randomly.

Pair Corralation between Paysafe and Allient

Given the investment horizon of 90 days Paysafe is expected to under-perform the Allient. In addition to that, Paysafe is 1.44 times more volatile than Allient. It trades about -0.04 of its total potential returns per unit of risk. Allient is currently generating about 0.22 per unit of volatility. If you would invest  1,919  in Allient on September 12, 2024 and sell it today you would earn a total of  816.00  from holding Allient or generate 42.52% return on investment over 90 days.

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

Paysafe  vs.  Allient

Paysafe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paysafe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Allient

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paysafe and Allient

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

The idea behind Paysafe and Allient 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.