Correlation Between Zenvia and Repay Holdings

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

By analyzing existing cross correlation between Zenvia Inc and Repay Holdings Corp, you can compare the effects of market volatilities on Zenvia and Repay Holdings 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 Zenvia with a short position of Repay Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zenvia and Repay Holdings.

Diversification Opportunities for Zenvia and Repay Holdings

-0.02

Correlation Coefficient

Zenvia  Repay Holdings

Good diversification

The 3 months correlation between Zenvia and Repay is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zenvia Inc and Repay Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repay Holdings Corp and Zenvia 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 Zenvia Inc are associated (or correlated) with Repay Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repay Holdings Corp has no effect on the direction of Zenvia i.e., Zenvia and Repay Holdings go up and down completely randomly.

Pair Corralation between Zenvia and Repay Holdings

Given the investment horizon of 90 days Zenvia Inc is expected to generate 2.09 times more return on investment than Repay Holdings. However, Zenvia is 2.09 times more volatile than Repay Holdings Corp. It trades about 0.01 of its potential returns per unit of risk. Repay Holdings Corp is currently generating about -0.01 per unit of risk. If you would invest  171.00  in Zenvia Inc on September 1, 2024 and sell it today you would lose (7.00) from holding Zenvia Inc or give up 4.09% of portfolio value over 90 days.

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

Zenvia Inc  vs.  Repay Holdings Corp

Zenvia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zenvia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Zenvia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Repay Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Repay Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Repay Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zenvia and Repay Holdings

The main advantage of trading using opposite Zenvia and Repay Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zenvia position performs unexpectedly, Repay Holdings 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 Repay Holdings will offset losses from the drop in Repay Holdings' long position.

The idea behind Zenvia Inc and Repay Holdings Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..