Correlation Between New Relic and PagSeguro Digital
Can any of the company-specific risk be diversified away by investing in both New Relic and PagSeguro Digital 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 New Relic and PagSeguro Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Relic and PagSeguro Digital, you can compare the effects of market volatilities on New Relic and PagSeguro Digital 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 New Relic with a short position of PagSeguro Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Relic and PagSeguro Digital.
Diversification Opportunities for New Relic and PagSeguro Digital
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between New and PagSeguro is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding New Relic and PagSeguro Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PagSeguro Digital and New Relic 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 New Relic are associated (or correlated) with PagSeguro Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PagSeguro Digital has no effect on the direction of New Relic i.e., New Relic and PagSeguro Digital go up and down completely randomly.
Pair Corralation between New Relic and PagSeguro Digital
If you would invest 7,164 in New Relic on August 28, 2024 and sell it today you would earn a total of 0.00 from holding New Relic or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
New Relic vs. PagSeguro Digital
Performance |
| Timeline |
| New Relic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PagSeguro Digital |
New Relic and PagSeguro Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Relic and PagSeguro Digital
The main advantage of trading using opposite New Relic and PagSeguro Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Relic position performs unexpectedly, PagSeguro Digital 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 PagSeguro Digital will offset losses from the drop in PagSeguro Digital's long position.The idea behind New Relic and PagSeguro Digital 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.| PagSeguro Digital vs. Marqeta | PagSeguro Digital vs. StoneCo | PagSeguro Digital vs. Confluent | PagSeguro Digital vs. Dlocal |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |