Correlation Between Repay Holdings and Evertec

Can any of the company-specific risk be diversified away by investing in both Repay Holdings and Evertec 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 Evertec 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 Evertec, you can compare the effects of market volatilities on Repay Holdings and Evertec 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 Evertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repay Holdings and Evertec.

Diversification Opportunities for Repay Holdings and Evertec

-0.81

Correlation Coefficient

Repay Holdings  Evertec

Pay attention - limited upside

The 3 months correlation between Repay and Evertec is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Repay Holdings Corp and Evertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertec 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 Evertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertec has no effect on the direction of Repay Holdings i.e., Repay Holdings and Evertec go up and down completely randomly.

Pair Corralation between Repay Holdings and Evertec

Given the investment horizon of 90 days Repay Holdings Corp is expected to under-perform the Evertec. In addition to that, Repay Holdings is 1.07 times more volatile than Evertec. It trades about -0.19 of its total potential returns per unit of risk. Evertec is currently generating about 0.07 per unit of volatility. If you would invest  3,427  in Evertec on December 29, 2024 and sell it today you would earn a total of  308.00  from holding Evertec or generate 8.99% return on investment over 90 days.

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

Repay Holdings Corp  vs.  Evertec

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.

Evertec

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Evertec may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Repay Holdings and Evertec

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

The idea behind Repay Holdings Corp and Evertec 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.