Correlation Between Paysafe and Avient Corp

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

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

Diversification Opportunities for Paysafe and Avient Corp

-0.27

Correlation Coefficient

Paysafe  Avient Corp

Very good diversification

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

Pair Corralation between Paysafe and Avient Corp

Given the investment horizon of 90 days Paysafe is expected to under-perform the Avient Corp. In addition to that, Paysafe is 2.33 times more volatile than Avient Corp. It trades about -0.04 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.08 per unit of volatility. If you would invest  4,571  in Avient Corp on September 12, 2024 and sell it today you would earn a total of  361.00  from holding Avient Corp or generate 7.9% return on investment over 90 days.

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

Paysafe  vs.  Avient Corp

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.

Avient Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avient Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Avient Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Paysafe and Avient Corp

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

The idea behind Paysafe and Avient Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.