Correlation Between WixCom and Paymentus Holdings
Can any of the company-specific risk be diversified away by investing in both WixCom and Paymentus Holdings 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 WixCom and Paymentus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WixCom and Paymentus Holdings, you can compare the effects of market volatilities on WixCom and Paymentus Holdings 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 WixCom with a short position of Paymentus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of WixCom and Paymentus Holdings.
Diversification Opportunities for WixCom and Paymentus Holdings
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WixCom and Paymentus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding WixCom and Paymentus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paymentus Holdings and WixCom 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 WixCom are associated (or correlated) with Paymentus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paymentus Holdings has no effect on the direction of WixCom i.e., WixCom and Paymentus Holdings go up and down completely randomly.
Pair Corralation between WixCom and Paymentus Holdings
Considering the 90-day investment horizon WixCom is expected to generate 1.24 times more return on investment than Paymentus Holdings. However, WixCom is 1.24 times more volatile than Paymentus Holdings. It trades about 0.27 of its potential returns per unit of risk. Paymentus Holdings is currently generating about 0.07 per unit of risk. If you would invest 18,434 in WixCom on September 14, 2024 and sell it today you would earn a total of 4,016 from holding WixCom or generate 21.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WixCom vs. Paymentus Holdings
Performance |
| Timeline |
| WixCom |
| Paymentus Holdings |
WixCom and Paymentus Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WixCom and Paymentus Holdings
The main advantage of trading using opposite WixCom and Paymentus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WixCom position performs unexpectedly, Paymentus Holdings 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 Paymentus Holdings will offset losses from the drop in Paymentus Holdings' long position.The idea behind WixCom and Paymentus Holdings 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.| Paymentus Holdings vs. Evertec | Paymentus Holdings vs. Couchbase | Paymentus Holdings vs. Flywire Corp | Paymentus Holdings vs. i3 Verticals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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