Correlation Between Two Hands and Innovative Payment

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

By analyzing existing cross correlation between Two Hands Corp and Innovative Payment Solutions, you can compare the effects of market volatilities on Two Hands and Innovative Payment 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 Two Hands with a short position of Innovative Payment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Two Hands and Innovative Payment.

Diversification Opportunities for Two Hands and Innovative Payment

-0.09

Correlation Coefficient

Two Hands  Innovative Payment

Good diversification

The 3 months correlation between Two and Innovative is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Two Hands Corp and Innovative Payment Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Payment and Two Hands 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 Two Hands Corp are associated (or correlated) with Innovative Payment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Payment has no effect on the direction of Two Hands i.e., Two Hands and Innovative Payment go up and down completely randomly.

Pair Corralation between Two Hands and Innovative Payment

Given the investment horizon of 90 days Two Hands Corp is expected to generate 40.32 times more return on investment than Innovative Payment. However, Two Hands is 40.32 times more volatile than Innovative Payment Solutions. It trades about 0.34 of its potential returns per unit of risk. Innovative Payment Solutions is currently generating about -0.13 per unit of risk. If you would invest  0.01  in Two Hands Corp on September 16, 2024 and sell it today you would lose (0.01) from holding Two Hands Corp or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Two Hands Corp  vs.  Innovative Payment Solutions

Two Hands Corp

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Two Hands Corp are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Two Hands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Innovative Payment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Payment Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Innovative Payment demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Two Hands and Innovative Payment

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

The idea behind Two Hands Corp and Innovative Payment Solutions 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.