Correlation Between Iargento and Payment Financial

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

Diversification Opportunities for Iargento and Payment Financial

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Iargento and Payment is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Iargento Hi Tech and Payment Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payment Financial and Iargento 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 Iargento Hi Tech are associated (or correlated) with Payment Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payment Financial has no effect on the direction of Iargento i.e., Iargento and Payment Financial go up and down completely randomly.

Pair Corralation between Iargento and Payment Financial

Assuming the 90 days trading horizon Iargento Hi Tech is expected to generate 1.26 times more return on investment than Payment Financial. However, Iargento is 1.26 times more volatile than Payment Financial Technologies. It trades about 0.39 of its potential returns per unit of risk. Payment Financial Technologies is currently generating about 0.46 per unit of risk. If you would invest  7,170  in Iargento Hi Tech on October 23, 2024 and sell it today you would earn a total of  2,530  from holding Iargento Hi Tech or generate 35.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy94.12%
ValuesDaily Returns

Iargento Hi Tech  vs.  Payment Financial Technologies

 Performance 
       Timeline  
Iargento Hi Tech 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Iargento Hi Tech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Iargento sustained solid returns over the last few months and may actually be approaching a breakup point.
Payment Financial 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Payment Financial Technologies are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Payment Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Iargento and Payment Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Iargento and Payment Financial

The main advantage of trading using opposite Iargento and Payment Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iargento position performs unexpectedly, Payment Financial 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 Payment Financial will offset losses from the drop in Payment Financial's long position.
The idea behind Iargento Hi Tech and Payment Financial Technologies 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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