Correlation Between Splitit Payments and Fobi AI

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

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

Diversification Opportunities for Splitit Payments and Fobi AI

0.47

Correlation Coefficient

Splitit Payments  Fobi AI

Very weak diversification

The 3 months correlation between Splitit and Fobi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Splitit Payments and Fobi AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fobi AI and Splitit Payments 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 Splitit Payments 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 Splitit Payments i.e., Splitit Payments and Fobi AI go up and down completely randomly.

Pair Corralation between Splitit Payments and Fobi AI

Assuming the 90 days horizon Splitit Payments is expected to under-perform the Fobi AI. But the otc stock apears to be less risky and, when comparing its historical volatility, Splitit Payments is 1.59 times less risky than Fobi AI. The otc stock trades about -0.13 of its potential returns per unit of risk. The Fobi AI is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Fobi AI on September 22, 2024 and sell it today you would lose (2.80) from holding Fobi AI or give up 70.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Splitit Payments  vs.  Fobi AI

Splitit Payments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Splitit Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Splitit Payments and Fobi AI

The main advantage of trading using opposite Splitit Payments and Fobi AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Splitit Payments 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 Splitit Payments 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.