Correlation Between SOCGEN and Paysafe

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

By analyzing existing cross correlation between SOCGEN 6691 10 JAN 34 and Paysafe, you can compare the effects of market volatilities on SOCGEN 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 SOCGEN with a short position of Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOCGEN and Paysafe.

Diversification Opportunities for SOCGEN and Paysafe

0.35

Correlation Coefficient

SOCGEN  Paysafe

Weak diversification

The 3 months correlation between SOCGEN and Paysafe is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SOCGEN 6691 10 JAN 34 and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe and SOCGEN 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 SOCGEN 6691 10 JAN 34 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 SOCGEN i.e., SOCGEN and Paysafe go up and down completely randomly.

Pair Corralation between SOCGEN and Paysafe

Assuming the 90 days trading horizon SOCGEN 6691 10 JAN 34 is expected to under-perform the Paysafe. But the bond apears to be less risky and, when comparing its historical volatility, SOCGEN 6691 10 JAN 34 is 7.36 times less risky than Paysafe. The bond trades about -0.06 of its potential returns per unit of risk. The Paysafe is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,988  in Paysafe on November 29, 2024 and sell it today you would lose (63.00) from holding Paysafe or give up 3.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	81.67%
Values	Daily Returns

SOCGEN 6691 10 JAN 34  vs.  Paysafe

SOCGEN 6691 10

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOCGEN 6691 10 JAN 34 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SOCGEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Paysafe

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Paysafe is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SOCGEN and Paysafe

The main advantage of trading using opposite SOCGEN and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCGEN 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 SOCGEN 6691 10 JAN 34 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.