Correlation Between Origin Materials and Paysafe

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

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

Diversification Opportunities for Origin Materials and Paysafe

-0.27

Correlation Coefficient

Origin Materials  Paysafe

Very good diversification

The 3 months correlation between Origin and Paysafe is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials Warrant 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 Origin Materials 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 Origin Materials Warrant 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 Origin Materials i.e., Origin Materials and Paysafe go up and down completely randomly.

Pair Corralation between Origin Materials and Paysafe

Assuming the 90 days horizon Origin Materials is expected to generate 17.1 times less return on investment than Paysafe. But when comparing it to its historical volatility, Origin Materials Warrant is 1.09 times less risky than Paysafe. It trades about 0.0 of its potential returns per unit of risk. Paysafe Ltd Wt is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2.55  in Paysafe Ltd Wt on September 12, 2024 and sell it today you would earn a total of  0.15  from holding Paysafe Ltd Wt or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Origin Materials Warrant  vs.  Paysafe Ltd Wt

Origin Materials Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Origin Materials Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Origin Materials is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Paysafe Ltd Wt

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paysafe Ltd Wt are ranked lower than 5 (%) 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 Origin Materials and Paysafe

The main advantage of trading using opposite Origin Materials and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Materials 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 Origin Materials Warrant 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.