Correlation Between Payment Financial and Victory Supermarket
Can any of the company-specific risk be diversified away by investing in both Payment Financial and Victory Supermarket 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 Payment Financial and Victory Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payment Financial Technologies and Victory Supermarket Chain, you can compare the effects of market volatilities on Payment Financial and Victory Supermarket 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 Payment Financial with a short position of Victory Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and Victory Supermarket.
Diversification Opportunities for Payment Financial and Victory Supermarket
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Payment and Victory is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies and Victory Supermarket Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Supermarket Chain and Payment Financial 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 Payment Financial Technologies are associated (or correlated) with Victory Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Supermarket Chain has no effect on the direction of Payment Financial i.e., Payment Financial and Victory Supermarket go up and down completely randomly.
Pair Corralation between Payment Financial and Victory Supermarket
Assuming the 90 days trading horizon Payment Financial Technologies is expected to generate 1.24 times more return on investment than Victory Supermarket. However, Payment Financial is 1.24 times more volatile than Victory Supermarket Chain. It trades about -0.1 of its potential returns per unit of risk. Victory Supermarket Chain is currently generating about -0.37 per unit of risk. If you would invest 41,327 in Payment Financial Technologies on December 26, 2024 and sell it today you would lose (1,817) from holding Payment Financial Technologies or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Payment Financial Technologies vs. Victory Supermarket Chain
Performance |
| Timeline |
| Payment Financial |
| Victory Supermarket Chain |
Payment Financial and Victory Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payment Financial and Victory Supermarket
The main advantage of trading using opposite Payment Financial and Victory Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payment Financial position performs unexpectedly, Victory Supermarket 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 Victory Supermarket will offset losses from the drop in Victory Supermarket's long position.| Payment Financial vs. Clal Biotechnology Industries | Payment Financial vs. Gilat Telecom Global | Payment Financial vs. IDI Insurance | Payment Financial vs. Harel Insurance Investments |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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