Correlation Between Repay Holdings and Optiva

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

Diversification Opportunities for Repay Holdings and Optiva

0.2

Correlation Coefficient

Repay Holdings  Optiva

Modest diversification

The 3 months correlation between Repay and Optiva is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Repay Holdings Corp and Optiva Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optiva Inc 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 Optiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optiva Inc has no effect on the direction of Repay Holdings i.e., Repay Holdings and Optiva go up and down completely randomly.

Pair Corralation between Repay Holdings and Optiva

Given the investment horizon of 90 days Repay Holdings Corp is expected to under-perform the Optiva. But the stock apears to be less risky and, when comparing its historical volatility, Repay Holdings Corp is 4.39 times less risky than Optiva. The stock trades about -0.19 of its potential returns per unit of risk. The Optiva Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  215.00  in Optiva Inc on December 30, 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

Repay Holdings Corp  vs.  Optiva Inc

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 weak 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.

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.

Pair Trading with Repay Holdings and Optiva

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

The idea behind Repay Holdings Corp and Optiva Inc 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.