Correlation Between PayPal Holdings and Junee Limited
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and Junee Limited 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 PayPal Holdings and Junee Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Junee Limited Ordinary, you can compare the effects of market volatilities on PayPal Holdings and Junee Limited 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 PayPal Holdings with a short position of Junee Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Junee Limited.
Diversification Opportunities for PayPal Holdings and Junee Limited
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PayPal and Junee is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Junee Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Junee Limited Ordinary and PayPal Holdings 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 PayPal Holdings are associated (or correlated) with Junee Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Junee Limited Ordinary has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and Junee Limited go up and down completely randomly.
Pair Corralation between PayPal Holdings and Junee Limited
Given the investment horizon of 90 days PayPal Holdings is expected to generate 2.12 times less return on investment than Junee Limited. But when comparing it to its historical volatility, PayPal Holdings is 2.05 times less risky than Junee Limited. It trades about 0.03 of its potential returns per unit of risk. Junee Limited Ordinary is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Junee Limited Ordinary on September 12, 2024 and sell it today you would earn a total of 44.00 from holding Junee Limited Ordinary or generate 10.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 33.54% |
Values | Daily Returns |
PayPal Holdings vs. Junee Limited Ordinary
Performance |
Timeline |
PayPal Holdings |
Junee Limited Ordinary |
PayPal Holdings and Junee Limited Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Junee Limited
The main advantage of trading using opposite PayPal Holdings and Junee Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, Junee Limited 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 Junee Limited will offset losses from the drop in Junee Limited's long position.PayPal Holdings vs. American Express | PayPal Holdings vs. Capital One Financial | PayPal Holdings vs. Upstart Holdings | PayPal Holdings vs. Ally Financial |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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