Correlation Between Paysafe and Carters

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

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

Diversification Opportunities for Paysafe and Carters

0.4

Correlation Coefficient

Paysafe  Carters

Very weak diversification

The 3 months correlation between Paysafe and Carters is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters 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 Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Paysafe i.e., Paysafe and Carters go up and down completely randomly.

Pair Corralation between Paysafe and Carters

Given the investment horizon of 90 days Paysafe is expected to under-perform the Carters. In addition to that, Paysafe is 1.55 times more volatile than Carters. It trades about -0.07 of its total potential returns per unit of risk. Carters is currently generating about -0.09 per unit of volatility. If you would invest  6,409  in Carters on October 3, 2024 and sell it today you would lose (990.00) from holding Carters or give up 15.45% of portfolio value over 90 days.

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

Paysafe  vs.  Carters

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 uncertain 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.

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Paysafe and Carters

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

The idea behind Paysafe and Carters 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 Commodity Directory module to find actively traded commodities issued by global exchanges.