Correlation Between Paysafe and 482620AX9

Can any of the company-specific risk be diversified away by investing in both Paysafe and 482620AX9 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 Paysafe and 482620AX9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Paysafe and K N ENERGY, you can compare the effects of market volatilities on Paysafe and 482620AX9 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 Paysafe with a short position of 482620AX9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and 482620AX9.

Diversification Opportunities for Paysafe and 482620AX9

0.2

Correlation Coefficient

Paysafe  482620AX9

Modest diversification

The 3 months correlation between Paysafe and 482620AX9 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and K N ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K N ENERGY and Paysafe 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 Paysafe are associated (or correlated) with 482620AX9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K N ENERGY has no effect on the direction of Paysafe i.e., Paysafe and 482620AX9 go up and down completely randomly.

Pair Corralation between Paysafe and 482620AX9

Given the investment horizon of 90 days Paysafe is expected to under-perform the 482620AX9. In addition to that, Paysafe is 1.16 times more volatile than K N ENERGY. It trades about -0.06 of its total potential returns per unit of risk. K N ENERGY is currently generating about -0.01 per unit of volatility. If you would invest  11,906  in K N ENERGY on September 16, 2024 and sell it today you would lose (347.00) from holding K N ENERGY or give up 2.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	47.69%
Values	Daily Returns

Paysafe  vs.  K N ENERGY

Paysafe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paysafe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

K N ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K N ENERGY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 482620AX9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Paysafe and 482620AX9

The main advantage of trading using opposite Paysafe and 482620AX9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe position performs unexpectedly, 482620AX9 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 482620AX9 will offset losses from the drop in 482620AX9's long position.

The idea behind Paysafe and K N ENERGY 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.