Correlation Between Papaya Growth and CD Projekt

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

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

Diversification Opportunities for Papaya Growth and CD Projekt

0.0

Correlation Coefficient

Papaya Growth  CD Projekt

Pay attention - limited upside

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

Pair Corralation between Papaya Growth and CD Projekt

If you would invest  4,455  in CD Projekt SA on December 28, 2024 and sell it today you would earn a total of  1,322  from holding CD Projekt SA or generate 29.67% return on investment over 90 days.

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

Papaya Growth Opportunity  vs.  CD Projekt SA

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. Despite somewhat strong basic indicators, Papaya Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CD Projekt SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CD Projekt SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, CD Projekt reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Papaya Growth and CD Projekt

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

The idea behind Papaya Growth Opportunity and CD Projekt SA 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.