Correlation Between ToughBuilt Industries and Pagaya Technologies

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

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

Diversification Opportunities for ToughBuilt Industries and Pagaya Technologies

0.11

Correlation Coefficient

ToughBuilt Industries  Pagaya Technologies

Average diversification

The 3 months correlation between ToughBuilt and Pagaya is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ToughBuilt Industries WT and Pagaya Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pagaya Technologies and ToughBuilt Industries 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 ToughBuilt Industries WT are associated (or correlated) with Pagaya Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pagaya Technologies has no effect on the direction of ToughBuilt Industries i.e., ToughBuilt Industries and Pagaya Technologies go up and down completely randomly.

Pair Corralation between ToughBuilt Industries and Pagaya Technologies

If you would invest  5.40  in ToughBuilt Industries WT on September 13, 2024 and sell it today you would earn a total of  0.00  from holding ToughBuilt Industries WT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

ToughBuilt Industries WT  vs.  Pagaya Technologies

ToughBuilt Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ToughBuilt Industries WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ToughBuilt Industries is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pagaya Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pagaya Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ToughBuilt Industries and Pagaya Technologies

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

The idea behind ToughBuilt Industries WT and Pagaya 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.