Correlation Between Paysafe and BAKER

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

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

Diversification Opportunities for Paysafe and BAKER

-0.06

Correlation Coefficient

Paysafe  BAKER

Good diversification

The 3 months correlation between Paysafe and BAKER is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A 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 BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of Paysafe i.e., Paysafe and BAKER go up and down completely randomly.

Pair Corralation between Paysafe and BAKER

Given the investment horizon of 90 days Paysafe is expected to generate 1.11 times less return on investment than BAKER. In addition to that, Paysafe is 1.91 times more volatile than BAKER HUGHES A. It trades about 0.03 of its total potential returns per unit of risk. BAKER HUGHES A is currently generating about 0.06 per unit of volatility. If you would invest  7,831  in BAKER HUGHES A on December 25, 2024 and sell it today you would earn a total of  506.00  from holding BAKER HUGHES A or generate 6.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.75%
Values	Daily Returns

Paysafe  vs.  BAKER HUGHES A

Paysafe

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Paysafe are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Paysafe may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BAKER HUGHES A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BAKER HUGHES A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BAKER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Paysafe and BAKER

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

The idea behind Paysafe and BAKER HUGHES A 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.