Correlation Between Bakkt Holdings and Paysafe
Can any of the company-specific risk be diversified away by investing in both Bakkt Holdings and Paysafe 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 Bakkt Holdings and Paysafe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakkt Holdings and Paysafe Ltd Wt, you can compare the effects of market volatilities on Bakkt Holdings and Paysafe 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 Bakkt Holdings with a short position of Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakkt Holdings and Paysafe.
Diversification Opportunities for Bakkt Holdings and Paysafe
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bakkt and Paysafe is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bakkt Holdings and Paysafe Ltd Wt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe Ltd Wt and Bakkt 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 Bakkt Holdings are associated (or correlated) with Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe Ltd Wt has no effect on the direction of Bakkt Holdings i.e., Bakkt Holdings and Paysafe go up and down completely randomly.
Pair Corralation between Bakkt Holdings and Paysafe
Given the investment horizon of 90 days Bakkt Holdings is expected to generate 2.09 times more return on investment than Paysafe. However, Bakkt Holdings is 2.09 times more volatile than Paysafe Ltd Wt. It trades about 0.19 of its potential returns per unit of risk. Paysafe Ltd Wt is currently generating about 0.09 per unit of risk. If you would invest 1,168 in Bakkt Holdings on August 29, 2024 and sell it today you would earn a total of 1,418 from holding Bakkt Holdings or generate 121.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakkt Holdings vs. Paysafe Ltd Wt
Performance |
| Timeline |
| Bakkt Holdings |
| Paysafe Ltd Wt |
Bakkt Holdings and Paysafe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakkt Holdings and Paysafe
The main advantage of trading using opposite Bakkt Holdings and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakkt Holdings position performs unexpectedly, Paysafe 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 Paysafe will offset losses from the drop in Paysafe's long position.| Bakkt Holdings vs. Arqit Quantum | Bakkt Holdings vs. Alarum Technologies | Bakkt Holdings vs. Edgio Inc | Bakkt Holdings vs. GigaCloud Technology Class |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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