Correlation Between Paysafe and CARPENTER

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

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

Diversification Opportunities for Paysafe and CARPENTER

-0.1

Correlation Coefficient

Paysafe  CARPENTER

Good diversification

The 3 months correlation between Paysafe and CARPENTER is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and CARPENTER TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARPENTER TECHNOLOGY 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 CARPENTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARPENTER TECHNOLOGY has no effect on the direction of Paysafe i.e., Paysafe and CARPENTER go up and down completely randomly.

Pair Corralation between Paysafe and CARPENTER

Given the investment horizon of 90 days Paysafe is expected to generate 6.92 times more return on investment than CARPENTER. However, Paysafe is 6.92 times more volatile than CARPENTER TECHNOLOGY P. It trades about 0.01 of its potential returns per unit of risk. CARPENTER TECHNOLOGY P is currently generating about 0.01 per unit of risk. If you would invest  2,133  in Paysafe on October 11, 2024 and sell it today you would lose (418.00) from holding Paysafe or give up 19.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Paysafe  vs.  CARPENTER TECHNOLOGY P

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.

CARPENTER TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARPENTER TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CARPENTER is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Paysafe and CARPENTER

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

The idea behind Paysafe and CARPENTER TECHNOLOGY P 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.