Correlation Between Banzai International and PAR Technology

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

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

Diversification Opportunities for Banzai International and PAR Technology

-0.25

Correlation Coefficient

Banzai International  PAR Technology

Very good diversification

The 3 months correlation between Banzai and PAR is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Banzai International and PAR Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAR Technology and Banzai International 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 Banzai International are associated (or correlated) with PAR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAR Technology has no effect on the direction of Banzai International i.e., Banzai International and PAR Technology go up and down completely randomly.

Pair Corralation between Banzai International and PAR Technology

Assuming the 90 days horizon Banzai International is expected to generate 7.87 times more return on investment than PAR Technology. However, Banzai International is 7.87 times more volatile than PAR Technology. It trades about 0.04 of its potential returns per unit of risk. PAR Technology is currently generating about 0.17 per unit of risk. If you would invest  1.57  in Banzai International on September 24, 2024 and sell it today you would lose (0.62) from holding Banzai International or give up 39.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.62%
Values	Daily Returns

Banzai International  vs.  PAR Technology

Banzai International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banzai International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, Banzai International showed solid returns over the last few months and may actually be approaching a breakup point.

PAR Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PAR Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, PAR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Banzai International and PAR Technology

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

The idea behind Banzai International and PAR Technology 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..