Correlation Between Under Armour and Paysafe

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

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

Diversification Opportunities for Under Armour and Paysafe

0.19

Correlation Coefficient

Under Armour  Paysafe

Average diversification

The 3 months correlation between Under and Paysafe is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe and Under Armour 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 Under Armour C 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 Under Armour i.e., Under Armour and Paysafe go up and down completely randomly.

Pair Corralation between Under Armour and Paysafe

Allowing for the 90-day total investment horizon Under Armour C is expected to under-perform the Paysafe. But the stock apears to be less risky and, when comparing its historical volatility, Under Armour C is 1.35 times less risky than Paysafe. The stock trades about -0.01 of its potential returns per unit of risk. The Paysafe is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,848  in Paysafe on October 3, 2024 and sell it today you would lose (136.00) from holding Paysafe or give up 7.36% of portfolio value over 90 days.

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

Under Armour C  vs.  Paysafe

Under Armour C

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Under Armour C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Under Armour is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Paysafe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paysafe 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Under Armour and Paysafe

The main advantage of trading using opposite Under Armour and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour 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 Under Armour C 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.