Correlation Between Pagerduty and Onion Global

Can any of the company-specific risk be diversified away by investing in both Pagerduty and Onion 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 Pagerduty and Onion Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pagerduty and Onion Global, you can compare the effects of market volatilities on Pagerduty and Onion 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 Pagerduty with a short position of Onion Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pagerduty and Onion Global.

Diversification Opportunities for Pagerduty and Onion Global

0.57

Correlation Coefficient

Pagerduty  Onion Global

Very weak diversification

The 3 months correlation between Pagerduty and Onion is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pagerduty and Onion Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onion Global and Pagerduty 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 Pagerduty are associated (or correlated) with Onion Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onion Global has no effect on the direction of Pagerduty i.e., Pagerduty and Onion Global go up and down completely randomly.

Pair Corralation between Pagerduty and Onion Global

Allowing for the 90-day total investment horizon Pagerduty is expected to generate 545.75 times less return on investment than Onion Global. But when comparing it to its historical volatility, Pagerduty is 19.92 times less risky than Onion Global. It trades about 0.0 of its potential returns per unit of risk. Onion Global is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  137.00  in Onion Global on January 25, 2024 and sell it today you would lose (129.00) from holding Onion Global or give up 94.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	43.12%
Values	Daily Returns

Pagerduty  vs.  Onion Global

Pagerduty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pagerduty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Onion Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onion Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Onion Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pagerduty and Onion Global

The main advantage of trading using opposite Pagerduty and Onion Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pagerduty position performs unexpectedly, Onion 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 Onion Global will offset losses from the drop in Onion Global's long position.

The idea behind Pagerduty and Onion Global 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.