Correlation Between Hivemapper and PAY

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

Diversification Opportunities for Hivemapper and PAY

HivemapperPAYDiversified AwayHivemapperPAYDiversified Away100%
-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Hivemapper and PAY is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hivemapper and PAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAY and Hivemapper 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 Hivemapper 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 Hivemapper i.e., Hivemapper and PAY go up and down completely randomly.

Pair Corralation between Hivemapper and PAY

Assuming the 90 days trading horizon Hivemapper is expected to under-perform the PAY. In addition to that, Hivemapper is 1.17 times more volatile than PAY. It trades about -0.17 of its total potential returns per unit of risk. PAY is currently generating about -0.01 per unit of volatility. If you would invest  0.69  in PAY on November 23, 2024 and sell it today you would lose (0.06) from holding PAY or give up 8.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hivemapper  vs.  PAY

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-200204060
JavaScript chart by amCharts 3.21.15HONEY PAY
       Timeline  
Hivemapper 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Hivemapper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Hivemapper shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.040.060.080.10.120.14
PAY 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PAY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for PAY shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.00650.0070.00750.008

Hivemapper and PAY Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-14.72-11.02-7.33-3.63-0.063.557.1610.7714.38 0.0050.0060.0070.0080.0090.010
JavaScript chart by amCharts 3.21.15HONEY PAY
       Returns  

Pair Trading with Hivemapper and PAY

The main advantage of trading using opposite Hivemapper and PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hivemapper 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 Hivemapper 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.
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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