Correlation Between Chicken Soup and Pagaya Technologies

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

By analyzing existing cross correlation between Chicken Soup For and Pagaya Technologies Ltd, you can compare the effects of market volatilities on Chicken Soup and Pagaya Technologies 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 Chicken Soup with a short position of Pagaya Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicken Soup and Pagaya Technologies.

Diversification Opportunities for Chicken Soup and Pagaya Technologies

0.62

Correlation Coefficient

Chicken Soup  Pagaya Technologies

Poor diversification

The 3 months correlation between Chicken and Pagaya is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chicken Soup For and Pagaya Technologies Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pagaya Technologies and Chicken Soup 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 Chicken Soup For are associated (or correlated) with Pagaya Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pagaya Technologies has no effect on the direction of Chicken Soup i.e., Chicken Soup and Pagaya Technologies go up and down completely randomly.

Pair Corralation between Chicken Soup and Pagaya Technologies

If you would invest (100.00) in Chicken Soup For on September 22, 2024 and sell it today you would earn a total of  100.00  from holding Chicken Soup For or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Chicken Soup For  vs.  Pagaya Technologies Ltd

Chicken Soup For

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chicken Soup For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Chicken Soup is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pagaya Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pagaya Technologies Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Chicken Soup and Pagaya Technologies

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

The idea behind Chicken Soup For and Pagaya Technologies Ltd 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.