Correlation Between Nuvve Holding and Paysafe

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

By analyzing existing cross correlation between Nuvve Holding Corp and Paysafe Ltd Wt, you can compare the effects of market volatilities on Nuvve Holding and Paysafe 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 Nuvve Holding with a short position of Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvve Holding and Paysafe.

Diversification Opportunities for Nuvve Holding and Paysafe

0.22

Correlation Coefficient

Nuvve Holding  Paysafe

Modest diversification

The 3 months correlation between Nuvve and Paysafe is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nuvve Holding Corp and Paysafe Ltd Wt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe Ltd Wt and Nuvve Holding 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 Nuvve Holding Corp are associated (or correlated) with Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe Ltd Wt has no effect on the direction of Nuvve Holding i.e., Nuvve Holding and Paysafe go up and down completely randomly.

Pair Corralation between Nuvve Holding and Paysafe

Assuming the 90 days horizon Nuvve Holding Corp is expected to generate 2.14 times more return on investment than Paysafe. However, Nuvve Holding is 2.14 times more volatile than Paysafe Ltd Wt. It trades about 0.09 of its potential returns per unit of risk. Paysafe Ltd Wt is currently generating about 0.08 per unit of risk. If you would invest  1.60  in Nuvve Holding Corp on August 31, 2024 and sell it today you would earn a total of  0.40  from holding Nuvve Holding Corp or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Nuvve Holding Corp  vs.  Paysafe Ltd Wt

Nuvve Holding Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuvve Holding Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Nuvve Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Paysafe Ltd Wt

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paysafe Ltd Wt are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Paysafe unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuvve Holding and Paysafe

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

The idea behind Nuvve Holding Corp and Paysafe Ltd Wt 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.