Correlation Between PAR Technology and Eventbrite

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

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

Diversification Opportunities for PAR Technology and Eventbrite

0.93

Correlation Coefficient

PAR Technology  Eventbrite

Almost no diversification

The 3 months correlation between PAR and Eventbrite is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding PAR Technology and Eventbrite Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventbrite Class A and PAR Technology 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 PAR Technology are associated (or correlated) with Eventbrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventbrite Class A has no effect on the direction of PAR Technology i.e., PAR Technology and Eventbrite go up and down completely randomly.

Pair Corralation between PAR Technology and Eventbrite

Considering the 90-day investment horizon PAR Technology is expected to under-perform the Eventbrite. But the stock apears to be less risky and, when comparing its historical volatility, PAR Technology is 1.98 times less risky than Eventbrite. The stock trades about -0.09 of its potential returns per unit of risk. The Eventbrite Class A is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  369.00  in Eventbrite Class A on September 25, 2024 and sell it today you would lose (14.00) from holding Eventbrite Class A or give up 3.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

PAR Technology  vs.  Eventbrite Class A

PAR Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PAR Technology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, PAR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Eventbrite Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eventbrite Class A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Eventbrite sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PAR Technology and Eventbrite

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

The idea behind PAR Technology and Eventbrite Class A 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.