Correlation Between Optiva and Repay Holdings

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

By analyzing existing cross correlation between Optiva Inc and Repay Holdings Corp, you can compare the effects of market volatilities on Optiva and Repay Holdings 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 Optiva with a short position of Repay Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optiva and Repay Holdings.

Diversification Opportunities for Optiva and Repay Holdings

0.24

Correlation Coefficient

Optiva  Repay Holdings

Modest diversification

The 3 months correlation between Optiva and Repay is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Optiva Inc and Repay Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repay Holdings Corp and Optiva 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 Optiva Inc are associated (or correlated) with Repay Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repay Holdings Corp has no effect on the direction of Optiva i.e., Optiva and Repay Holdings go up and down completely randomly.

Pair Corralation between Optiva and Repay Holdings

Assuming the 90 days horizon Optiva Inc is expected to generate 4.39 times more return on investment than Repay Holdings. However, Optiva is 4.39 times more volatile than Repay Holdings Corp. It trades about -0.02 of its potential returns per unit of risk. Repay Holdings Corp is currently generating about -0.19 per unit of risk. If you would invest  215.00  in Optiva Inc on December 29, 2024 and sell it today you would lose (93.00) from holding Optiva Inc or give up 43.26% of portfolio value over 90 days.

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

Optiva Inc  vs.  Repay Holdings Corp

Optiva Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Optiva Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Repay Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repay Holdings Corp 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Optiva and Repay Holdings

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

The idea behind Optiva Inc and Repay Holdings Corp 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.