Correlation Between Repay Holdings and Fobi AI

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

By analyzing existing cross correlation between Repay Holdings Corp and Fobi AI, you can compare the effects of market volatilities on Repay Holdings and Fobi AI 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 Repay Holdings with a short position of Fobi AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repay Holdings and Fobi AI.

Diversification Opportunities for Repay Holdings and Fobi AI

-0.16

Correlation Coefficient

Repay Holdings  Fobi AI

Good diversification

The 3 months correlation between Repay and Fobi is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Repay Holdings Corp and Fobi AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fobi AI and Repay Holdings 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 Repay Holdings Corp are associated (or correlated) with Fobi AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fobi AI has no effect on the direction of Repay Holdings i.e., Repay Holdings and Fobi AI go up and down completely randomly.

Pair Corralation between Repay Holdings and Fobi AI

Given the investment horizon of 90 days Repay Holdings is expected to generate 1.31 times less return on investment than Fobi AI. But when comparing it to its historical volatility, Repay Holdings Corp is 8.3 times less risky than Fobi AI. It trades about 0.03 of its potential returns per unit of risk. Fobi AI is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2.90  in Fobi AI on September 22, 2024 and sell it today you would lose (1.90) from holding Fobi AI or give up 65.52% of portfolio value over 90 days.

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

Repay Holdings Corp  vs.  Fobi AI

Repay Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Repay Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Fobi AI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fobi AI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Fobi AI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Repay Holdings and Fobi AI

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

The idea behind Repay Holdings Corp and Fobi AI 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.