Correlation Between Network 1 and Repay Holdings

Can any of the company-specific risk be diversified away by investing in both Network 1 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 Network 1 and Repay Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Network 1 Technologies and Repay Holdings Corp, you can compare the effects of market volatilities on Network 1 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 Network 1 with a short position of Repay Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network 1 and Repay Holdings.

Diversification Opportunities for Network 1 and Repay Holdings

-0.13

Correlation Coefficient

Network 1  Repay Holdings

Good diversification

The 3 months correlation between Network and Repay is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Network 1 Technologies 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 Network 1 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 Network 1 Technologies 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 Network 1 i.e., Network 1 and Repay Holdings go up and down completely randomly.

Pair Corralation between Network 1 and Repay Holdings

Given the investment horizon of 90 days Network 1 Technologies is expected to generate 0.83 times more return on investment than Repay Holdings. However, Network 1 Technologies is 1.21 times less risky than Repay Holdings. 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  140.00  in Network 1 Technologies on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Network 1 Technologies or generate 0.0% return on investment over 90 days.

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

Network 1 Technologies  vs.  Repay Holdings Corp

Network 1 Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Network 1 Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Network 1 is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail 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 Network 1 and Repay Holdings

The main advantage of trading using opposite Network 1 and Repay Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network 1 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 Network 1 Technologies 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.

Check out your portfolio center.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.