Correlation Between PagSeguro Digital and Liveramp Holdings

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

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

Diversification Opportunities for PagSeguro Digital and Liveramp Holdings

-0.31

Correlation Coefficient

PagSeguro Digital  Liveramp Holdings

Very good diversification

The 3 months correlation between PagSeguro and Liveramp is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PagSeguro Digital and Liveramp Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liveramp Holdings and PagSeguro Digital 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 PagSeguro Digital are associated (or correlated) with Liveramp Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liveramp Holdings has no effect on the direction of PagSeguro Digital i.e., PagSeguro Digital and Liveramp Holdings go up and down completely randomly.

Pair Corralation between PagSeguro Digital and Liveramp Holdings

Given the investment horizon of 90 days PagSeguro Digital is expected to under-perform the Liveramp Holdings. In addition to that, PagSeguro Digital is 1.04 times more volatile than Liveramp Holdings. It trades about -0.05 of its total potential returns per unit of risk. Liveramp Holdings is currently generating about 0.11 per unit of volatility. If you would invest  2,697  in Liveramp Holdings on May 7, 2025 and sell it today you would earn a total of  560.00  from holding Liveramp Holdings or generate 20.76% return on investment over 90 days.

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

PagSeguro Digital  vs.  Liveramp Holdings

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 unfluctuating 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.

Liveramp Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Liveramp Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Liveramp Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PagSeguro Digital and Liveramp Holdings

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

The idea behind PagSeguro Digital and Liveramp 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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.