Correlation Between Sure Tech and Payment Financial

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Can any of the company-specific risk be diversified away by investing in both Sure Tech and Payment Financial 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 Sure Tech and Payment Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sure Tech Investments LP and Payment Financial Technologies, you can compare the effects of market volatilities on Sure Tech and Payment Financial 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 Sure Tech with a short position of Payment Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sure Tech and Payment Financial.

Diversification Opportunities for Sure Tech and Payment Financial

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Sure and Payment is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sure Tech Investments LP and Payment Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payment Financial and Sure Tech 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 Sure Tech Investments LP are associated (or correlated) with Payment Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payment Financial has no effect on the direction of Sure Tech i.e., Sure Tech and Payment Financial go up and down completely randomly.

Pair Corralation between Sure Tech and Payment Financial

Assuming the 90 days trading horizon Sure Tech Investments LP is expected to generate 1.65 times more return on investment than Payment Financial. However, Sure Tech is 1.65 times more volatile than Payment Financial Technologies. It trades about 0.32 of its potential returns per unit of risk. Payment Financial Technologies is currently generating about -0.09 per unit of risk. If you would invest  59,500  in Sure Tech Investments LP on September 28, 2024 and sell it today you would earn a total of  17,710  from holding Sure Tech Investments LP or generate 29.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sure Tech Investments LP  vs.  Payment Financial Technologies

 Performance 
       Timeline  
Sure Tech Investments 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Sure Tech Investments LP are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sure Tech sustained solid returns over the last few months and may actually be approaching a breakup point.
Payment Financial 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
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.

Sure Tech and Payment Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sure Tech and Payment Financial

The main advantage of trading using opposite Sure Tech and Payment Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sure Tech position performs unexpectedly, Payment Financial 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 Payment Financial will offset losses from the drop in Payment Financial's long position.
The idea behind Sure Tech Investments LP and Payment Financial Technologies 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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