Correlation Between Paysafe and Stepan
Can any of the company-specific risk be diversified away by investing in both Paysafe and Stepan 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 Paysafe and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paysafe and Stepan Company, you can compare the effects of market volatilities on Paysafe and Stepan 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 Paysafe with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and Stepan.
Diversification Opportunities for Paysafe and Stepan
Average diversification
The 3 months correlation between Paysafe and Stepan is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and Paysafe 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 Paysafe are associated (or correlated) with Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Paysafe i.e., Paysafe and Stepan go up and down completely randomly.
Pair Corralation between Paysafe and Stepan
Given the investment horizon of 90 days Paysafe is expected to under-perform the Stepan. In addition to that, Paysafe is 2.73 times more volatile than Stepan Company. It trades about -0.02 of its total potential returns per unit of risk. Stepan Company is currently generating about 0.13 per unit of volatility. If you would invest 7,246 in Stepan Company on September 3, 2024 and sell it today you would earn a total of 444.00 from holding Stepan Company or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paysafe vs. Stepan Company
Performance |
| Timeline |
| Paysafe |
| Stepan Company |
Paysafe and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paysafe and Stepan
The main advantage of trading using opposite Paysafe and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.| Paysafe vs. Skillz Platform | Paysafe vs. SoFi Technologies | Paysafe vs. Clover Health Investments | Paysafe vs. Opendoor Technologies |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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