Correlation Between Brookfield Corp and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Brookfield Corp and PayPal 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 Brookfield Corp and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Corp and PayPal Holdings, you can compare the effects of market volatilities on Brookfield Corp and PayPal 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 Brookfield Corp with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and PayPal Holdings.
Diversification Opportunities for Brookfield Corp and PayPal Holdings
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and PayPal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and Brookfield Corp 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 Brookfield Corp are associated (or correlated) with PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and PayPal Holdings go up and down completely randomly.
Pair Corralation between Brookfield Corp and PayPal Holdings
Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 0.6 times more return on investment than PayPal Holdings. However, Brookfield Corp is 1.67 times less risky than PayPal Holdings. It trades about 0.08 of its potential returns per unit of risk. PayPal Holdings is currently generating about -0.14 per unit of risk. If you would invest 5,838 in Brookfield Corp on November 9, 2024 and sell it today you would earn a total of 168.00 from holding Brookfield Corp or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Corp vs. PayPal Holdings
Performance |
| Timeline |
| Brookfield Corp |
| PayPal Holdings |
Brookfield Corp and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Corp and PayPal Holdings
The main advantage of trading using opposite Brookfield Corp and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp position performs unexpectedly, PayPal 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 PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.| Brookfield Corp vs. KKR Co LP | Brookfield Corp vs. Blackstone Group | Brookfield Corp vs. T Rowe Price | Brookfield Corp vs. Apollo Global Management |
| PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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