Correlation Between Payment Financial and More Provident

Can any of the company-specific risk be diversified away by investing in both Payment Financial and More Provident 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 More Provident 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 More Provident Funds, you can compare the effects of market volatilities on Payment Financial and More Provident 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 More Provident. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and More Provident.

Diversification Opportunities for Payment Financial and More Provident

0.79

Correlation Coefficient

Payment Financial  More Provident

Poor diversification

The 3 months correlation between Payment and More is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies and More Provident Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on More Provident Funds 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 More Provident. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of More Provident Funds has no effect on the direction of Payment Financial i.e., Payment Financial and More Provident go up and down completely randomly.

Pair Corralation between Payment Financial and More Provident

Assuming the 90 days trading horizon Payment Financial is expected to generate 2.3 times less return on investment than More Provident. In addition to that, Payment Financial is 1.78 times more volatile than More Provident Funds. It trades about 0.13 of its total potential returns per unit of risk. More Provident Funds is currently generating about 0.53 per unit of volatility. If you would invest  43,721  in More Provident Funds on September 17, 2024 and sell it today you would earn a total of  30,359  from holding More Provident Funds or generate 69.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.87%
Values	Daily Returns

Payment Financial Technologies  vs.  More Provident Funds

Payment Financial

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Payment Financial Technologies are ranked lower than 10 (%) 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.

More Provident Funds

Risk-Adjusted Performance

41 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in More Provident Funds are ranked lower than 41 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, More Provident sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Payment Financial and More Provident

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

The idea behind Payment Financial Technologies and More Provident Funds 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.