Correlation Between CROWN and Paysafe

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

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

Diversification Opportunities for CROWN and Paysafe

-0.24

Correlation Coefficient

CROWN  Paysafe

Very good diversification

The 3 months correlation between CROWN and Paysafe is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CROWN CASTLE INTERNATIONAL and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe and CROWN 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 CROWN CASTLE INTERNATIONAL 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 CROWN i.e., CROWN and Paysafe go up and down completely randomly.

Pair Corralation between CROWN and Paysafe

Assuming the 90 days trading horizon CROWN is expected to generate 4.2 times less return on investment than Paysafe. But when comparing it to its historical volatility, CROWN CASTLE INTERNATIONAL is 15.25 times less risky than Paysafe. It trades about 0.06 of its potential returns per unit of risk. Paysafe is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,833  in Paysafe on October 4, 2024 and sell it today you would lose (102.00) from holding Paysafe or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.99%
Values	Daily Returns

CROWN CASTLE INTERNATIONAL  vs.  Paysafe

CROWN CASTLE INTERNA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CROWN CASTLE INTERNATIONAL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The newest 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 weak 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 CROWN and Paysafe

The main advantage of trading using opposite CROWN and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CROWN 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 CROWN CASTLE INTERNATIONAL 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.