Correlation Between Stem and Paysign
Can any of the company-specific risk be diversified away by investing in both Stem and Paysign 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 Stem and Paysign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stem Inc and Paysign, you can compare the effects of market volatilities on Stem and Paysign 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 Stem with a short position of Paysign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stem and Paysign.
Diversification Opportunities for Stem and Paysign
Very good diversification
The 3 months correlation between Stem and Paysign is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stem Inc and Paysign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysign and Stem 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 Stem Inc are associated (or correlated) with Paysign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysign has no effect on the direction of Stem i.e., Stem and Paysign go up and down completely randomly.
Pair Corralation between Stem and Paysign
Given the investment horizon of 90 days Stem Inc is expected to under-perform the Paysign. In addition to that, Stem is 1.5 times more volatile than Paysign. It trades about -0.2 of its total potential returns per unit of risk. Paysign is currently generating about 0.02 per unit of volatility. If you would invest 266.00 in Paysign on December 2, 2024 and sell it today you would lose (1.00) from holding Paysign or give up 0.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Stem Inc vs. Paysign
Performance |
Timeline |
Stem Inc |
Paysign |
Stem and Paysign Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stem and Paysign
The main advantage of trading using opposite Stem and Paysign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stem position performs unexpectedly, Paysign 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 Paysign will offset losses from the drop in Paysign's long position.Stem vs. Palo Alto Networks | Stem vs. Crowdstrike Holdings | Stem vs. Cloudflare | Stem vs. Palantir Technologies Class |
Paysign vs. NetScout Systems | Paysign vs. Priority Technology Holdings | Paysign vs. OneSpan | Paysign vs. Consensus Cloud Solutions |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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