Correlation Between Telsys and Payment Financial
Can any of the company-specific risk be diversified away by investing in both Telsys and Payment Financial 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 Telsys and Payment Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telsys and Payment Financial Technologies, you can compare the effects of market volatilities on Telsys and Payment Financial 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 Telsys with a short position of Payment Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telsys and Payment Financial.
Diversification Opportunities for Telsys and Payment Financial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telsys and Payment is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Telsys and Payment Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payment Financial and Telsys 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 Telsys are associated (or correlated) with Payment Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payment Financial has no effect on the direction of Telsys i.e., Telsys and Payment Financial go up and down completely randomly.
Pair Corralation between Telsys and Payment Financial
Assuming the 90 days trading horizon Telsys is expected to generate 4.47 times less return on investment than Payment Financial. But when comparing it to its historical volatility, Telsys is 1.19 times less risky than Payment Financial. It trades about 0.01 of its potential returns per unit of risk. Payment Financial Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 26,702 in Payment Financial Technologies on September 2, 2024 and sell it today you would earn a total of 7,908 from holding Payment Financial Technologies or generate 29.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telsys vs. Payment Financial Technologies
Performance |
| Timeline |
| Telsys |
| Payment Financial |
Telsys and Payment Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telsys and Payment Financial
The main advantage of trading using opposite Telsys and Payment Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telsys position performs unexpectedly, Payment Financial 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 Payment Financial will offset losses from the drop in Payment Financial's long position.The idea behind Telsys and Payment Financial Technologies 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.| Payment Financial vs. Telsys | Payment Financial vs. EN Shoham Business | Payment Financial vs. Brainsway | Payment Financial vs. Mivne Real Estate |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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