Correlation Between Pagaya Technologies and Dlocal
Can any of the company-specific risk be diversified away by investing in both Pagaya Technologies and Dlocal 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 Pagaya Technologies and Dlocal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pagaya Technologies Ltd and Dlocal, you can compare the effects of market volatilities on Pagaya Technologies and Dlocal 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 Pagaya Technologies with a short position of Dlocal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pagaya Technologies and Dlocal.
Diversification Opportunities for Pagaya Technologies and Dlocal
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pagaya and Dlocal is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pagaya Technologies Ltd and Dlocal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dlocal and Pagaya Technologies 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 Pagaya Technologies Ltd are associated (or correlated) with Dlocal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dlocal has no effect on the direction of Pagaya Technologies i.e., Pagaya Technologies and Dlocal go up and down completely randomly.
Pair Corralation between Pagaya Technologies and Dlocal
Assuming the 90 days horizon Pagaya Technologies Ltd is expected to under-perform the Dlocal. In addition to that, Pagaya Technologies is 2.86 times more volatile than Dlocal. It trades about -0.22 of its total potential returns per unit of risk. Dlocal is currently generating about 0.27 per unit of volatility. If you would invest 909.00 in Dlocal on August 27, 2024 and sell it today you would earn a total of 226.00 from holding Dlocal or generate 24.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pagaya Technologies Ltd vs. Dlocal
Performance |
| Timeline |
| Pagaya Technologies |
| Dlocal |
Pagaya Technologies and Dlocal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pagaya Technologies and Dlocal
The main advantage of trading using opposite Pagaya Technologies and Dlocal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pagaya Technologies position performs unexpectedly, Dlocal 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 Dlocal will offset losses from the drop in Dlocal's long position.| Pagaya Technologies vs. GigaCloud Technology Class | Pagaya Technologies vs. Arqit Quantum | Pagaya Technologies vs. Telos Corp | Pagaya Technologies vs. Cemtrex |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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