Correlation Between Payment Financial and Amanet Management

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

By analyzing existing cross correlation between Payment Financial Technologies and Amanet Management Systems, you can compare the effects of market volatilities on Payment Financial and Amanet Management 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 Payment Financial with a short position of Amanet Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and Amanet Management.

Diversification Opportunities for Payment Financial and Amanet Management

0.48

Correlation Coefficient

Payment Financial  Amanet Management

Very weak diversification

The 3 months correlation between Payment and Amanet is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies and Amanet Management Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanet Management Systems and Payment Financial 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 Payment Financial Technologies are associated (or correlated) with Amanet Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanet Management Systems has no effect on the direction of Payment Financial i.e., Payment Financial and Amanet Management go up and down completely randomly.

Pair Corralation between Payment Financial and Amanet Management

Assuming the 90 days trading horizon Payment Financial Technologies is expected to under-perform the Amanet Management. In addition to that, Payment Financial is 1.21 times more volatile than Amanet Management Systems. It trades about -0.09 of its total potential returns per unit of risk. Amanet Management Systems is currently generating about 0.04 per unit of volatility. If you would invest  160,700  in Amanet Management Systems on September 28, 2024 and sell it today you would earn a total of  2,300  from holding Amanet Management Systems or generate 1.43% return on investment over 90 days.

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

Payment Financial Technologies  vs.  Amanet Management Systems

Payment Financial

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Payment Financial Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Payment Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Amanet Management Systems

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amanet Management Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amanet Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Payment Financial and Amanet Management

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

The idea behind Payment Financial Technologies and Amanet Management Systems 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.