Correlation Between Revelation Biosciences and Pagaya Technologies

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

By analyzing existing cross correlation between Revelation Biosciences and Pagaya Technologies Ltd, you can compare the effects of market volatilities on Revelation Biosciences and Pagaya Technologies 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 Revelation Biosciences with a short position of Pagaya Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revelation Biosciences and Pagaya Technologies.

Diversification Opportunities for Revelation Biosciences and Pagaya Technologies

0.0

Correlation Coefficient

Revelation Biosciences  Pagaya Technologies

Pay attention - limited upside

The 3 months correlation between Revelation and Pagaya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Revelation Biosciences and Pagaya Technologies Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pagaya Technologies and Revelation Biosciences 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 Revelation Biosciences are associated (or correlated) with Pagaya Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pagaya Technologies has no effect on the direction of Revelation Biosciences i.e., Revelation Biosciences and Pagaya Technologies go up and down completely randomly.

Pair Corralation between Revelation Biosciences and Pagaya Technologies

If you would invest  0.68  in Revelation Biosciences on December 30, 2024 and sell it today you would earn a total of  0.50  from holding Revelation Biosciences or generate 73.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Revelation Biosciences  vs.  Pagaya Technologies Ltd

Revelation Biosciences

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Revelation Biosciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Revelation Biosciences showed solid returns over the last few months and may actually be approaching a breakup point.

Pagaya Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pagaya Technologies Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Pagaya Technologies is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Revelation Biosciences and Pagaya Technologies

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

The idea behind Revelation Biosciences and Pagaya Technologies Ltd 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.