Correlation Between Paysafe and Chemtrade Logistics

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

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

Diversification Opportunities for Paysafe and Chemtrade Logistics

0.26

Correlation Coefficient

Paysafe  Chemtrade Logistics

Modest diversification

The 3 months correlation between Paysafe and Chemtrade is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and Chemtrade Logistics Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemtrade Logistics 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 Chemtrade Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemtrade Logistics has no effect on the direction of Paysafe i.e., Paysafe and Chemtrade Logistics go up and down completely randomly.

Pair Corralation between Paysafe and Chemtrade Logistics

Given the investment horizon of 90 days Paysafe is expected to generate 0.96 times more return on investment than Chemtrade Logistics. However, Paysafe is 1.04 times less risky than Chemtrade Logistics. It trades about -0.34 of its potential returns per unit of risk. Chemtrade Logistics Income is currently generating about -0.43 per unit of risk. If you would invest  1,938  in Paysafe on October 10, 2024 and sell it today you would lose (223.00) from holding Paysafe or give up 11.51% of portfolio value over 90 days.

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

Paysafe  vs.  Chemtrade Logistics Income

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Chemtrade Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemtrade Logistics Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Paysafe and Chemtrade Logistics

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

The idea behind Paysafe and Chemtrade Logistics Income 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.