Correlation Between Repay Holdings and Alarum Technologies

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

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

Diversification Opportunities for Repay Holdings and Alarum Technologies

0.1

Correlation Coefficient

Repay Holdings  Alarum Technologies

Average diversification

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

Pair Corralation between Repay Holdings and Alarum Technologies

Given the investment horizon of 90 days Repay Holdings Corp is expected to generate 0.47 times more return on investment than Alarum Technologies. However, Repay Holdings Corp is 2.13 times less risky than Alarum Technologies. It trades about 0.02 of its potential returns per unit of risk. Alarum Technologies is currently generating about -0.13 per unit of risk. If you would invest  768.00  in Repay Holdings Corp on October 6, 2024 and sell it today you would earn a total of  2.00  from holding Repay Holdings Corp or generate 0.26% return on investment over 90 days.

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

Repay Holdings Corp  vs.  Alarum Technologies

Repay Holdings Corp

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Repay Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alarum Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alarum Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Alarum Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Repay Holdings and Alarum Technologies

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

The idea behind Repay Holdings Corp and Alarum Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.