Correlation Between HONEYWELL and Paysafe

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

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

Diversification Opportunities for HONEYWELL and Paysafe

0.06

Correlation Coefficient

HONEYWELL  Paysafe

Significant diversification

The 3 months correlation between HONEYWELL and Paysafe is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding HONEYWELL INTL INC and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe and HONEYWELL 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 HONEYWELL INTL INC 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 HONEYWELL i.e., HONEYWELL and Paysafe go up and down completely randomly.

Pair Corralation between HONEYWELL and Paysafe

Assuming the 90 days trading horizon HONEYWELL INTL INC is expected to under-perform the Paysafe. But the bond apears to be less risky and, when comparing its historical volatility, HONEYWELL INTL INC is 11.89 times less risky than Paysafe. The bond trades about -0.08 of its potential returns per unit of risk. The Paysafe is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,766  in Paysafe on December 26, 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	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

HONEYWELL INTL INC  vs.  Paysafe

HONEYWELL INTL INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days HONEYWELL INTL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HONEYWELL is not utilizing all of its potentials. The latest stock price disturbance, 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 HONEYWELL and Paysafe

The main advantage of trading using opposite HONEYWELL and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HONEYWELL 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 HONEYWELL INTL INC 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.