Correlation Between Godaddy and PagSeguro Digital

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

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

Diversification Opportunities for Godaddy and PagSeguro Digital

0.65

Correlation Coefficient

Godaddy  PagSeguro Digital

Poor diversification

The 3 months correlation between Godaddy and PagSeguro is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Godaddy and PagSeguro Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PagSeguro Digital and Godaddy 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 Godaddy are associated (or correlated) with PagSeguro Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PagSeguro Digital has no effect on the direction of Godaddy i.e., Godaddy and PagSeguro Digital go up and down completely randomly.

Pair Corralation between Godaddy and PagSeguro Digital

Given the investment horizon of 90 days Godaddy is expected to under-perform the PagSeguro Digital. But the stock apears to be less risky and, when comparing its historical volatility, Godaddy is 3.1 times less risky than PagSeguro Digital. The stock trades about -0.22 of its potential returns per unit of risk. The PagSeguro Digital is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  927.00  in PagSeguro Digital on May 7, 2025 and sell it today you would lose (126.00) from holding PagSeguro Digital or give up 13.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Godaddy  vs.  PagSeguro Digital

Godaddy

Risk-Adjusted Performance

Weakest

Over the last 90 days Godaddy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PagSeguro Digital

Risk-Adjusted Performance

Weakest

Over the last 90 days PagSeguro Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Godaddy and PagSeguro Digital

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

The idea behind Godaddy and PagSeguro Digital 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.