Correlation Between Fobi AI and Payfare

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

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

Diversification Opportunities for Fobi AI and Payfare

0.75

Correlation Coefficient

Fobi AI  Payfare

Poor diversification

The 3 months correlation between Fobi and Payfare is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fobi AI and Payfare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payfare and Fobi AI 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 Fobi AI 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 Fobi AI i.e., Fobi AI and Payfare go up and down completely randomly.

Pair Corralation between Fobi AI and Payfare

Assuming the 90 days trading horizon Fobi AI is expected to under-perform the Payfare. In addition to that, Fobi AI is 1.03 times more volatile than Payfare. It trades about -0.04 of its total potential returns per unit of risk. Payfare is currently generating about -0.01 per unit of volatility. If you would invest  380.00  in Payfare on September 21, 2024 and sell it today you would lose (236.00) from holding Payfare or give up 62.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.63%
Values	Daily Returns

Fobi AI  vs.  Payfare

Fobi AI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fobi AI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers 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.

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 fragile 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 Fobi AI and Payfare

The main advantage of trading using opposite Fobi AI and Payfare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fobi AI 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 Fobi AI 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.