| FOUR Stock | | | USD 69.72 1.08 1.53% |
The correlation of Shift4 Payments is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Shift4 Payments moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Shift4 Payments moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Very weak diversification
The correlation between Shift4 Payments and NYA is 0.44 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Shift4 Payments and NYA in the same portfolio, assuming nothing else is changed.
Check out
Investing Opportunities to better understand how to build diversified portfolios, which includes a position in Shift4 Payments. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as
signals in employment.
To learn how to invest in Shift4 Stock, please use our
How to Invest in Shift4 Payments guide.
The ability to find closely correlated positions to Shift4 Payments could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Shift4 Payments when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Shift4 Payments - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Shift4 Payments to buy it.
Correlation Matchups
Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
High positive correlations | | High negative correlations | CSGS | | GDDY | | SQSP | | CSGS | | VRSN | | GDDY | | VRSN | | SQSP |
|
Risk-Adjusted IndicatorsThere is a big difference between Shift4 Stock performing well and Shift4 Payments Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Shift4 Payments' multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.
When running Shift4 Payments' price analysis, check to
measure Shift4 Payments' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Shift4 Payments is operating at the current time. Most of Shift4 Payments' value examination focuses on studying past and present price action to
predict the probability of Shift4 Payments' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Shift4 Payments' price. Additionally, you may evaluate how the addition of Shift4 Payments to your portfolios can decrease your overall portfolio volatility.