Correlation Between Chubb and Papaya Growth

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

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

Diversification Opportunities for Chubb and Papaya Growth

0.0

Correlation Coefficient

Chubb  Papaya Growth

Pay attention - limited upside

The 3 months correlation between Chubb and Papaya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chubb and Papaya Growth Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papaya Growth Opportunity and Chubb 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 Chubb are associated (or correlated) with Papaya Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papaya Growth Opportunity has no effect on the direction of Chubb i.e., Chubb and Papaya Growth go up and down completely randomly.

Pair Corralation between Chubb and Papaya Growth

If you would invest  27,454  in Chubb on December 28, 2024 and sell it today you would earn a total of  2,382  from holding Chubb or generate 8.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Chubb  vs.  Papaya Growth Opportunity

Chubb

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chubb are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Chubb may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Papaya Growth Opportunity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Papaya Growth Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Papaya Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chubb and Papaya Growth

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

The idea behind Chubb and Papaya Growth Opportunity 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.