Correlation Between Crowdstrike Holdings and Payfare

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

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

Diversification Opportunities for Crowdstrike Holdings and Payfare

-0.53

Correlation Coefficient

Crowdstrike Holdings  Payfare

Excellent diversification

The 3 months correlation between Crowdstrike and Payfare is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Payfare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payfare and Crowdstrike Holdings 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 Crowdstrike Holdings are associated (or correlated) with Payfare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payfare has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Payfare go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and Payfare

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 0.25 times more return on investment than Payfare. However, Crowdstrike Holdings is 3.93 times less risky than Payfare. It trades about 0.25 of its potential returns per unit of risk. Payfare is currently generating about -0.11 per unit of risk. If you would invest  26,712  in Crowdstrike Holdings on September 18, 2024 and sell it today you would earn a total of  12,108  from holding Crowdstrike Holdings or generate 45.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Crowdstrike Holdings  vs.  Payfare

Crowdstrike Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Crowdstrike Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Payfare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Payfare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Crowdstrike Holdings and Payfare

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

The idea behind Crowdstrike Holdings and Payfare 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 Commodity Directory module to find actively traded commodities issued by global exchanges.