Correlation Between Big Time and PAY
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By analyzing existing cross correlation between Big Time and PAY, you can compare the effects of market volatilities on Big Time and PAY 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 Big Time with a short position of PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Time and PAY.
Diversification Opportunities for Big Time and PAY
Good diversification
The 3 months correlation between Big and PAY is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Big Time and PAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAY and Big Time 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 Big Time are associated (or correlated) with PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAY has no effect on the direction of Big Time i.e., Big Time and PAY go up and down completely randomly.
Pair Corralation between Big Time and PAY
Assuming the 90 days trading horizon Big Time is expected to generate 0.96 times more return on investment than PAY. However, Big Time is 1.04 times less risky than PAY. It trades about 0.14 of its potential returns per unit of risk. PAY is currently generating about -0.07 per unit of risk. If you would invest 15.00 in Big Time on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Big Time or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Time vs. PAY
Performance |
| Timeline |
| Big Time |
| PAY |
Big Time and PAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Time and PAY
The main advantage of trading using opposite Big Time and PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Time position performs unexpectedly, PAY 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 PAY will offset losses from the drop in PAY's long position.The idea behind Big Time and PAY 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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