Correlation Between NESNVX and Paysafe

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

By analyzing existing cross correlation between NESNVX 25 14 SEP 41 and Paysafe, you can compare the effects of market volatilities on NESNVX 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 NESNVX with a short position of Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Paysafe.

Diversification Opportunities for NESNVX and Paysafe

-0.07

Correlation Coefficient

NESNVX  Paysafe

Good diversification

The 3 months correlation between NESNVX and Paysafe is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 25 14 SEP 41 and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe and NESNVX 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 NESNVX 25 14 SEP 41 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 NESNVX i.e., NESNVX and Paysafe go up and down completely randomly.

Pair Corralation between NESNVX and Paysafe

Assuming the 90 days trading horizon NESNVX 25 14 SEP 41 is expected to under-perform the Paysafe. But the bond apears to be less risky and, when comparing its historical volatility, NESNVX 25 14 SEP 41 is 2.5 times less risky than Paysafe. The bond trades about -0.18 of its potential returns per unit of risk. The Paysafe is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,157  in Paysafe on October 3, 2024 and sell it today you would lose (445.00) from holding Paysafe or give up 20.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	32.26%
Values	Daily Returns

NESNVX 25 14 SEP 41  vs.  Paysafe

NESNVX 25 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 25 14 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for NESNVX 25 14 SEP 41 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 NESNVX and Paysafe

The main advantage of trading using opposite NESNVX and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESNVX 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 NESNVX 25 14 SEP 41 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.