Correlation Between Saudi American and Paysafe

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

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

Diversification Opportunities for Saudi American and Paysafe

0.0

Correlation Coefficient

Saudi American  Paysafe

Pay attention - limited upside

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

Pair Corralation between Saudi American and Paysafe

If you would invest  1,766  in Paysafe on December 25, 2024 and sell it today you would earn a total of  24.00  from holding Paysafe or generate 1.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Saudi American Holdings  vs.  Paysafe

Saudi American Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saudi American Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Saudi American is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Paysafe

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Paysafe are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Paysafe may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Saudi American and Paysafe

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

The idea behind Saudi American Holdings and Paysafe 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.

Check out your portfolio center.

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.