Correlation Between Nuvalent and Payoneer Global

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

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

Diversification Opportunities for Nuvalent and Payoneer Global

-0.61

Correlation Coefficient

Nuvalent  Payoneer Global

Excellent diversification

The 3 months correlation between Nuvalent and Payoneer is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nuvalent and Payoneer Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payoneer Global and Nuvalent 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 Nuvalent are associated (or correlated) with Payoneer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payoneer Global has no effect on the direction of Nuvalent i.e., Nuvalent and Payoneer Global go up and down completely randomly.

Pair Corralation between Nuvalent and Payoneer Global

Given the investment horizon of 90 days Nuvalent is expected to under-perform the Payoneer Global. But the stock apears to be less risky and, when comparing its historical volatility, Nuvalent is 1.08 times less risky than Payoneer Global. The stock trades about -0.42 of its potential returns per unit of risk. The Payoneer Global is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  1,091  in Payoneer Global on September 30, 2024 and sell it today you would lose (90.00) from holding Payoneer Global or give up 8.25% of portfolio value over 90 days.

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

Nuvalent  vs.  Payoneer Global

Nuvalent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvalent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Payoneer Global

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Payoneer Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Payoneer Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuvalent and Payoneer Global

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

The idea behind Nuvalent and Payoneer Global 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.