Correlation Between Payment Financial and Wesure Global
Can any of the company-specific risk be diversified away by investing in both Payment Financial and Wesure Global 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 Wesure Global 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 Wesure Global Tech, you can compare the effects of market volatilities on Payment Financial and Wesure Global 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 Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and Wesure Global.
Diversification Opportunities for Payment Financial and Wesure Global
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Payment and Wesure is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of Payment Financial i.e., Payment Financial and Wesure Global go up and down completely randomly.
Pair Corralation between Payment Financial and Wesure Global
Assuming the 90 days trading horizon Payment Financial Technologies is expected to generate 1.85 times more return on investment than Wesure Global. However, Payment Financial is 1.85 times more volatile than Wesure Global Tech. It trades about 0.39 of its potential returns per unit of risk. Wesure Global Tech is currently generating about 0.64 per unit of risk. If you would invest 25,581 in Payment Financial Technologies on August 29, 2024 and sell it today you would earn a total of 9,389 from holding Payment Financial Technologies or generate 36.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payment Financial Technologies vs. Wesure Global Tech
Performance |
| Timeline |
| Payment Financial |
| Wesure Global Tech |
Payment Financial and Wesure Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payment Financial and Wesure Global
The main advantage of trading using opposite Payment Financial and Wesure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payment Financial position performs unexpectedly, Wesure Global 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 Wesure Global will offset losses from the drop in Wesure Global's long position.| Payment Financial vs. Unitronics | Payment Financial vs. PCB Tec | Payment Financial vs. Tower Semiconductor | Payment Financial vs. Priortech |
| Wesure Global vs. Brainsway | Wesure Global vs. Mivne Real Estate | Wesure Global vs. Photomyne | Wesure Global vs. Bezeq Israeli Telecommunication |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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